Why Hospira (HSP) Stock Is Lower Today

NEW YORK (TheStreet) -- Shares of Hospira Inc. (HSP) are down -2.27% to $54.22 after the drug maker sued the FDA over its decision to pave the way for generic forms of Hospira's Precedex sedative, the Wall Street Journal reports.

The FDA approved some applications for generic forms of Precedex, often used to anesthetize patients, and seems ready to grant more, the company said.

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TheStreet Ratings team rates HOSPIRA INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate HOSPIRA INC (HSP) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, compelling growth in net income, good cash flow from operations and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."

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

  • The revenue growth came in higher than the industry average of 4.5%. Since the same quarter one year prior, revenues rose by 10.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 110.00% and other important driving factors, this stock has surged by 38.34% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, HSP should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • 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 115.5% when compared to the same quarter one year prior, rising from $32.90 million to $70.90 million.
  • Net operating cash flow has significantly increased by 427.51% to $157.20 million when compared to the same quarter last year. In addition, HOSPIRA INC has also vastly surpassed the industry average cash flow growth rate of -3.89%.
  • 45.05% is the gross profit margin for HOSPIRA INC which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, HSP's net profit margin of 6.24% significantly trails the industry average.
  • You can view the full analysis from the report here: HSP Ratings Report

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