Today's Post-Market Loser: Express Scripts (ESRX)

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.

Trade-Ideas LLC identified Express Scripts ( ESRX) as a post-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified Express Scripts as such a stock due to the following factors:

  • ESRX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $349.2 million.
  • ESRX is down 3.7% today from today's close.

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More details on ESRX:

Express Scripts Holding Company provides a range of pharmacy benefit management (PBM) services primarily in the United States and Canada. The company offers healthcare management and administration services on behalf of its clients. ESRX has a PE ratio of 33.4. Currently there are 15 analysts that rate Express Scripts a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Express Scripts has been 5.4 million shares per day over the past 30 days. Express Scripts has a market cap of $55.4 billion and is part of the health care sector and health services industry. The stock has a beta of 1.52 and a short float of 2.2% with 3.53 days to cover. Shares are up 1.1% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Express Scripts as a buy. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, growth in earnings per share, largely solid financial position with reasonable debt levels by most measures, solid stock price performance and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • Net operating cash flow has slightly increased to $2,925.20 million or 8.72% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -5.71%.
  • EXPRESS SCRIPTS HOLDING CO's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, EXPRESS SCRIPTS HOLDING CO increased its bottom line by earning $2.31 versus $1.85 in the prior year. This year, the market expects an improvement in earnings ($4.95 versus $2.31).
  • 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 26.02% over the past year, a rise that has exceeded that of the S&P 500 Index. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • The debt-to-equity ratio is somewhat low, currently at 0.64, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.46 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • ESRX, with its decline in revenue, underperformed when compared the industry average of 10.4%. Since the same quarter one year prior, revenues slightly dropped by 5.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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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