Impax Laboratories Inc Stock Upgraded (IPXL)

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.

NEW YORK ( TheStreet) -- Impax Laboratories (Nasdaq: IPXL) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, increase in net income and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 4.6%. Since the same quarter one year prior, revenues rose by 45.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • IPXL has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.69, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for IMPAX LABORATORIES INC is rather high; currently it is at 58.35%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 18.64% is above that of the industry average.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Pharmaceuticals industry. The net income increased by 524.1% when compared to the same quarter one year prior, rising from $5.62 million to $35.07 million.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

If you liked this article you might like

Impax Shares Jump After Chinese Firm Reveals 5% Stake

Teva, Mylan Seen to Stay on M&A Sidelines

Teva's Massive Debt Load Just Became an Even Bigger Issue

Teva Shares Are Getting Obliterated Again After Vicious Investment Bank Downgrades

Teva Shares Are Taking a Beating and Dragging Down the Generic Drugmakers