Celgene Corporation Stock Buy Recommendation Reiterated (CELG)

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) -- Celgene Corporation (Nasdaq: CELG) has been reiterated by TheStreet Ratings as a buy with a ratings score of A . The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, solid stock price performance and good cash flow from operations. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

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Highlights from the ratings report include:
  • CELG's revenue growth has slightly outpaced the industry average of 5.9%. Since the same quarter one year prior, revenues rose by 12.7%. 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, 0.54, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 2.88, which clearly demonstrates the ability to cover short-term cash needs.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Biotechnology industry and the overall market, CELGENE CORP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • Compared to its closing price of one year ago, CELG's share price has jumped by 40.00%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, CELG should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Net operating cash flow has slightly increased to $490.39 million or 4.29% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -34.11%.

Celgene Corporation, a biopharmaceutical company, engages in the discovery, development, and commercialization of various therapies to treat cancer and immune-inflammatory related diseases in the United States, Europe, and other countries. Celgene has a market cap of $45.38 billion and is part of the health care sector and drugs industry. The company has a P/E ratio of 32.8, above the S&P 500 P/E ratio of 17.7. Shares are up 38.1% year to date as of the close of trading on Wednesday.

You can view the full Celgene Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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