Conceptus Inc. Stock Upgraded (CPTS)

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) -- 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, impressive record of earnings per share growth, compelling growth in net income, solid stock price performance and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

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Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 8.5%. Since the same quarter one year prior, revenues rose by 21.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CONCEPTUS 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 year. We feel that this trend should continue. During the past fiscal year, CONCEPTUS INC turned its bottom line around by earning $0.15 versus -$0.25 in the prior year. This year, the market expects an improvement in earnings ($0.21 versus $0.15).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Equipment & Supplies industry. The net income increased by 329.2% when compared to the same quarter one year prior, rising from -$2.56 million to $5.87 million.
  • Powered by its strong earnings growth of 312.50% and other important driving factors, this stock has surged by 67.89% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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.
  • The gross profit margin for CONCEPTUS INC is currently very high, coming in at 89.40%. 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 14.41% compares favorably to the industry average.
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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. The company has a P/E ratio of 133.2, above the S&P 500 P/E ratio of 17.7. Conceptus has a market cap of $674.8 million and is part of the health care sector and health services industry. Shares are up 1.5% year to date as of the close of trading on Thursday.

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

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.

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