NEW YORK ( TheStreet) -- Impax Laboratories (Nasdaq: IPXL) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself. Highlights from the ratings report include:
- IPXL has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.38, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for IMPAX LABORATORIES INC is rather high; currently it is at 55.20%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 14.40% trails the industry average.
- IPXL, with its very weak revenue results, has greatly underperformed against the industry average of 6.6%. Since the same quarter one year prior, revenues plummeted by 60.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- IMPAX LABORATORIES INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, IMPAX LABORATORIES INC increased its bottom line by earning $3.88 versus $0.81 in the prior year. For the next year, the market is expecting a contraction of 76.0% in earnings ($0.93 versus $3.88).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Pharmaceuticals industry. The net income has significantly decreased by 77.1% when compared to the same quarter one year ago, falling from $75.16 million to $17.22 million.