Conceptus Inc. Stock Upgraded (CPTS)

NEW YORK ( TheStreet) -- Conceptus (Nasdaq: CPTS) 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, solid stock price performance and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 7.7%. Since the same quarter one year prior, revenues slightly increased by 5.0%. 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.
  • Compared to its closing price of one year ago, CPTS's share price has jumped by 63.12%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, CPTS should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • CONCEPTUS 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. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, CONCEPTUS INC swung to a loss, reporting -$0.25 versus $2.60 in the prior year. This year, the market expects an improvement in earnings ($0.07 versus -$0.25).
  • The gross profit margin for CONCEPTUS INC is currently very high, coming in at 88.30%. Regardless of CPTS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CPTS's net profit margin of 0.20% is significantly lower than the same period one year prior.
  • 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 Health Care Equipment & Supplies industry. The net income has significantly decreased by 86.6% when compared to the same quarter one year ago, falling from $0.45 million to $0.06 million.

Conceptus, Inc. designs, develops, and markets minimally invasive devices for reproductive medical applications primarily in the United States, France, and rest of Europe. It primarily provides Essure, a permanent birth control system that delivers an insert into a woman's fallopian tubes. Conceptus has a market cap of $594.3 million and is part of the health care sector and health services industry. Shares are up 49.8% year to date as of the close of trading on Wednesday.

You can view the full Conceptus Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

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