NEW YORK (TheStreet) -- Express Scripts (ESRX) was falling 3.88% to $74.13 on Friday morning after the pharmacy benefits manager reported its fourth-quarter results and issued first-quarter guidance.
Express Scripts reported net income of $506 million, or 63 cents a share, down from $511 million, or 61 cents a share, in the same period one year earlier. The company reported record adjusted earnings per share of $1.12, which aligned exactly with analysts' estimates, according to Thomson Reuters I/B/E/S.
The company also issued EPS guidance of $4.88 to $5, while analysts expect $4.93.
"With the industry's broadest set of solutions now available on one technology platform, we enter 2014 with momentum and unique capabilities to address the needs of our clients," said Chairman and CEO George Paz in the company's statement. "Our innovative solutions, ability to successfully manage healthcare reform, and unmatched size and scale position us for long-term organic growth as we better control client costs and improve patient outcomes."
TheStreet Ratings team rates EXPRESS SCRIPTS HOLDING CO as a "buy" with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate EXPRESS SCRIPTS HOLDING CO (ESRX) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, reasonable valuation levels, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and growth in earnings per share. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 38.19% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, ESRX 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 increased to $1,036.30 million or 30.64% when compared to the same quarter last year. In addition, EXPRESS SCRIPTS HOLDING CO has also vastly surpassed the industry average cash flow growth rate of -46.42%.
- The current debt-to-equity ratio, 0.60, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that ESRX's debt-to-equity ratio is low, the quick ratio, which is currently 0.61, displays a potential problem in covering short-term cash needs.
- EXPRESS SCRIPTS HOLDING CO has improved earnings per share by 8.0% 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, EXPRESS SCRIPTS HOLDING CO reported lower earnings of $1.85 versus $2.52 in the prior year. This year, the market expects an improvement in earnings ($4.32 versus $1.85).
- You can view the full analysis from the report here: ESRX Ratings Report