PerkinElmer Inc Stock Upgraded (PKI)

NEW YORK ( TheStreet) -- PerkinElmer (NYSE: PKI) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • PKI's revenue growth has slightly outpaced the industry average of 10.4%. Since the same quarter one year prior, revenues rose by 14.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has significantly increased by 185.33% to $82.53 million when compared to the same quarter last year. In addition, PERKINELMER INC has also vastly surpassed the industry average cash flow growth rate of 28.30%.
  • The gross profit margin for PERKINELMER INC is rather high; currently it is at 53.70%. 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 -15.50% is in-line with the industry average.
  • The current debt-to-equity ratio, 0.51, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.92 is somewhat weak and could be cause for future problems.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
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PerkinElmer, Inc. provides technology, services, and solutions to the diagnostics, research, environmental, industrial, and laboratory services markets worldwide. The company operates in two segments, Human Health and Environmental Health. The company has a P/E ratio of 2730, above the average health services industry P/E ratio of 7.4 and above the S&P 500 P/E ratio of 17.7. PerkinElmer has a market cap of $2.7 billion and is part of the health care sector and health services industry. Shares are up 36.7% year to date as of the close of trading on Tuesday.

You can view the full PerkinElmer Ratings Report or get investment ideas from our investment research center.
-- Written by a member of TheStreet RatingsStaff
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