Editor's Note: 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. NEW YORK ( TheStreet) -- Endo Health Solutions (Nasdaq: ENDP) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its increase in net income, growth in earnings per share and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
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- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Pharmaceuticals industry. The net income increased by 32.4% when compared to the same quarter one year prior, rising from $40.65 million to $53.81 million.
- ENDO HEALTH SOLUTIONS INC has improved earnings per share by 32.4% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ENDO HEALTH SOLUTIONS INC reported lower earnings of $1.54 versus $2.18 in the prior year. This year, the market expects an improvement in earnings ($5.02 versus $1.54).
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 3.9%. Since the same quarter one year prior, revenues slightly dropped by 1.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The gross profit margin for ENDO HEALTH SOLUTIONS INC is rather high; currently it is at 69.80%. Regardless of ENDP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ENDP's net profit margin of 7.20% is significantly lower than the same period one year prior.
- Net operating cash flow has decreased to $120.79 million or 40.85% when compared to the same quarter last year. Despite a decrease in cash flow ENDO HEALTH SOLUTIONS INC is still fairing well by exceeding its industry average cash flow growth rate of -70.74%.
-- Written by a member of TheStreet Ratings Staff