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) -- HCA Holdings (NYSE: HCA) has been reiterated by TheStreet Ratings as a sell with a ratings score of D+ . The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, weak operating cash flow and poor profit margins.
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- HCA HOLDINGS INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, HCA HOLDINGS INC reported lower earnings of $3.49 versus $5.31 in the prior year. For the next year, the market is expecting a contraction of 8.9% in earnings ($3.18 versus $3.49).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Health Care Providers & Services industry. The net income has significantly decreased by 83.8% when compared to the same quarter one year ago, falling from $1,935.00 million to $314.00 million.
- Net operating cash flow has declined marginally to $1,263.00 million or 8.94% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The gross profit margin for HCA HOLDINGS INC is rather low; currently it is at 18.00%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 3.72% is above that of the industry average.
- Compared to its closing price of one year ago, HCA's share price has jumped by 49.26%, exceeding the performance of the broader market during that same time frame. Regarding the future course of this stock, we feel that the risks involved in investing in HCA do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
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