Pharmerica Corp Stock Downgraded (PMC)

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) -- Pharmerica (NYSE: PMC) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

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Highlights from the ratings report include:
  • PMC's revenue growth trails the industry average of 21.0%. Since the same quarter one year prior, revenues slightly increased by 4.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The current debt-to-equity ratio, 0.58, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, PMC has a quick ratio of 1.66, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for PHARMERICA CORP is rather low; currently it is at 19.24%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -2.16% trails that of the industry average.
  • Net operating cash flow has significantly decreased to -$26.50 million or 199.62% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

PharMerica Corporation operates as an institutional pharmacy services company in the United States. The company offers services to healthcare facilities; pharmacy management services to hospitals; specialty infusion services to patients outside hospitals; and oncology pharmacy services. Pharmerica has a market cap of $810.7 million and is part of the services sector and retail industry. Shares are up 22.4% year to date as of the close of trading on Wednesday.

You can view the full Pharmerica 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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