Why ExamWorks (EXAM) Stock Is Down Today

NEW YORK (TheStreet) -- ExamWorks (EXAM) was falling -12.5% to $30.79 Tuesday after pricing a spot secondary offering of 3,096,274 shares.

The company priced the offering at $33.90 a share, which will result in aggregate proceeds of $104,963,688 for the shareholders selling the common stock. The offer represents about 8% for the total outstanding common stock in ExamWorks.

Deutsche Bank (DB) acted as the sold book running manager for the offering.

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TheStreet Ratings team rates EXAMWORKS GROUP INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate EXAMWORKS GROUP INC (EXAM) 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, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet."

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

  • EXAM's revenue growth has slightly outpaced the industry average of 11.8%. Since the same quarter one year prior, revenues rose by 16.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Powered by its strong earnings growth of 90.00% and other important driving factors, this stock has surged by 94.11% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • 35.83% is the gross profit margin for EXAMWORKS GROUP INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -0.16% trails the industry average.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Health Care Providers & Services industry and the overall market, EXAMWORKS GROUP INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The debt-to-equity ratio of 1.37 is relatively high when compared with the industry average, suggesting a need for better debt level management. Regardless of the company's weak debt-to-equity ratio, EXAM has managed to keep a strong quick ratio of 1.54, which demonstrates the ability to cover short-term cash needs.
  • You can view the full analysis from the report here: EXAM Ratings Report

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

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.

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