Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. NEW YORK ( TheStreet) -- Molina Healthcare (NYSE: MOH) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and poor profit margins.
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- MOH's revenue growth has slightly outpaced the industry average of 3.9%. Since the same quarter one year prior, revenues slightly increased by 8.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- 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 165.9% when compared to the same quarter one year prior, rising from -$37.31 million to $24.57 million.
- 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 $0.32 versus $0.44 in the prior year. This year, the market expects an improvement in earnings ($1.60 versus $0.32).
- The gross profit margin for MOLINA HEALTHCARE INC is currently extremely low, coming in at 14.28%. Regardless of MOH's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 1.53% trails the industry average.
- Net operating cash flow has significantly decreased to -$131.85 million or 171.11% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.