NEW YORK ( TheStreet) -- Conmed Healthcare Management (AMEX: CONM) 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, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins. Highlights from the ratings report include:
- CONM's revenue growth has slightly outpaced the industry average of 10.9%. Since the same quarter one year prior, revenues rose by 16.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- CONM's debt-to-equity ratio is very low at 0.04 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, CONM has a quick ratio of 2.47, which demonstrates the ability of the company to cover short-term liquidity needs.
- CONMED HEALTHCARE MGMT INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CONMED HEALTHCARE MGMT INC increased its bottom line by earning $0.10 versus $0.08 in the prior year. This year, the market expects an improvement in earnings ($0.14 versus $0.10).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Providers & Services industry. The net income increased by 477.6% when compared to the same quarter one year prior, rising from $0.38 million to $2.17 million.
- Net operating cash flow has significantly increased by 338.56% to $1.96 million when compared to the same quarter last year. In addition, CONMED HEALTHCARE MGMT INC has also vastly surpassed the industry average cash flow growth rate of -94.42%.
-- Written by a member of TheStreet RatingsStaff