Why WebMD (WBMD) Is Gaining on Friday

NEW YORK (TheStreet) -- WebMD Health Corp (WBMD) is moving higher over Friday's session after upping its buyback authorization by $40 million.

By midafternoon, shares had added 4.3% to $43.27.

In a filing with the SEC, the online health service said by the close of business March 20, around $51 million was available under the repurchase program, including the additional $40 million.

"Under the Repurchase Program, WebMD may repurchase shares from time to time in the open market, through block trades or in private transactions, depending on market conditions and other factors," the company said in the filing.

During the first quarter ending March, the company has repurchased around 1.4 million of common stock for an aggregate purchase price of approximately $58.7 million.

As of Thursday, New York-based WebMD had around 39.7 million shares outstanding.

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TheStreet Ratings team rates WEBMD HEALTH CORP as a Hold with a ratings score of C. The team has this to say about their recommendation:

"We rate WEBMD HEALTH CORP (WBMD) 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 impressive record of earnings per share growth, compelling growth in net income and revenue growth. However, as a counter to these strengths, we find that the growth in the company's earnings per share has not been good."

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

  • WEBMD HEALTH CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, WEBMD HEALTH CORP turned its bottom line around by earning $0.31 versus -$0.44 in the prior year. This year, the market expects an improvement in earnings ($0.72 versus $0.31).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet Software & Services industry. The net income increased by 264.3% when compared to the same quarter one year prior, rising from -$6.09 million to $10.00 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 16.4%. Since the same quarter one year prior, revenues slightly increased by 9.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 291.66% and other important driving factors, this stock has surged by 74.02% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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