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.

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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.

Impax Laboratories, Inc., a specialty pharmaceutical company, develops, manufactures, and markets bioequivalent pharmaceutical products; and develops and markets branded products. The company operates through two segments, Global Pharmaceuticals Division and Impax Pharmaceutical Division. Impax has a market cap of $1.69 billion and is part of the health care sector and drugs industry. Shares are down 6.1% year to date as of the close of trading on Friday.

You can view the full Impax Ratings Report or get investment ideas from our investment research center.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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