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) -- Amerigroup Corporation (NYSE: AGP) has been reiterated by TheStreet Ratings as a buy with a ratings score of B . The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.
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- AGP's very impressive revenue growth greatly exceeded the industry average of 14.4%. Since the same quarter one year prior, revenues leaped by 52.9%. 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.
- The current debt-to-equity ratio, 0.33, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.05, which illustrates the ability to avoid short-term cash problems.
- Net operating cash flow has significantly increased by 112.23% to $273.11 million when compared to the same quarter last year. In addition, AMERIGROUP CORP has also vastly surpassed the industry average cash flow growth rate of -83.44%.
- Compared to its closing price of one year ago, AGP's share price has jumped by 60.19%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- AMERIGROUP CORP's earnings per share declined by 35.4% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, AMERIGROUP CORP reported lower earnings of $3.83 versus $5.40 in the prior year. For the next year, the market is expecting a contraction of 4.7% in earnings ($3.65 versus $3.83).
--Written by a member of TheStreet Ratings Staff.HOLIDAY SPECIAL: Let Jim Cramer show you every trade he is making in his $2.5 Million portfolio. Join now for 14-days FREE. Sign up today to get e-mail alerts before every trade