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) -- Questcor Pharmaceuticals (Nasdaq: QCOR) 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, notable return on equity, expanding profit margins 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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- QCOR's very impressive revenue growth greatly exceeded the industry average of 7.8%. Since the same quarter one year prior, revenues leaped by 134.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- QCOR has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, QCOR has a quick ratio of 2.02, which demonstrates the ability of the company to cover short-term liquidity needs.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Pharmaceuticals industry and the overall market, QUESTCOR PHARMACEUTICALS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The gross profit margin for QUESTCOR PHARMACEUTICALS INC is currently very high, coming in at 94.70%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 39.68% significantly outperformed against the industry average.
- Net operating cash flow has significantly increased by 57.20% to $51.25 million when compared to the same quarter last year. In addition, QUESTCOR PHARMACEUTICALS INC has also vastly surpassed the industry average cash flow growth rate of -55.00%.
-- Written by a member of TheStreet Ratings Staff