Why Cepheid (CPHD) Is Up Today

NEW YORK (TheStreet) -- Cepheid  (CPHD) was rising 14.24% to $54 on Friday afternoon after the molecular diagnostics company posted fourth-quarter results that exceeded analysts' expectations.

The company reported an adjusted EPS of three cents per share and a revenue increase of more than 22% to $113.3 million, thanks in part to an increase of 51% in clinical systems sales. Analysts had forecast a loss of 11 cents on revenue of $102.2 million.

TheStreet Ratings team rates CEPHEID INC as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate CEPHEID INC (CPHD) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. 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 and solid stock price performance. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 10.5%. Since the same quarter one year prior, revenues rose by 24.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CPHD's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.35, which illustrates the ability to avoid short-term cash problems.
  • CEPHEID 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, CEPHEID INC swung to a loss, reporting -$0.30 versus $0.04 in the prior year. This year, the market expects an improvement in earnings (-$0.23 versus -$0.30).
  • 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 Biotechnology industry and the overall market, CEPHEID INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $6.92 million or 27.35% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • You can view the full analysis from the report here: CPHD Ratings Report

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