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) -- Molina Healthcare (NYSE: MOH) has been upgraded by TheStreet Ratings from hold to buy. 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, increase in net income, growth in earnings per share and good cash flow from operations. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
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- MOH's revenue growth has slightly outpaced the industry average of 16.5%. Since the same quarter one year prior, revenues rose by 20.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.34, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, MOH has a quick ratio of 1.56, which demonstrates the ability of the company to cover short-term liquidity needs.
- 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 177.8% when compared to the same quarter one year prior, rising from -$32.96 million to $25.64 million.
- Net operating cash flow has increased to $80.27 million or 14.29% when compared to the same quarter last year. Despite an increase in cash flow of 14.29%, MOLINA HEALTHCARE INC is still growing at a significantly lower rate than the industry average of 534.42%.
- MOLINA HEALTHCARE INC reported significant earnings per share improvement 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, MOLINA HEALTHCARE INC reported lower earnings of $0.20 versus $0.44 in the prior year. This year, the market expects an improvement in earnings ($1.50 versus $0.20).
-- Written by a member of TheStreet Ratings Staff