Community Health Systems Inc. (CYH) Upgraded to Buy from Hold

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NEW YORK (TheStreet) -- Community Health Systems Inc.  (CYH) has been upgraded by TheStreet Ratings to "buy" from "hold" with a ratings score of B-.  TheStreet Ratings Team has this to say about their recommendation:

"We rate COMMUNITY HEALTH SYSTEMS INC (CYH) a BUY. This is driven by some important positives, 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 robust revenue growth, good cash flow from operations, solid stock price performance, increase in net income and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

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

  • The revenue growth came in higher than the industry average of 20.6%. Since the same quarter one year prior, revenues rose by 49.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 33.17% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, CYH 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 Health Care Providers & Services industry. The net income increased by 40.0% when compared to the same quarter one year prior, rising from $30.00 million to $42.00 million.
  • Net operating cash flow has significantly increased by 78.16% to $449.00 million when compared to the same quarter last year. In addition, COMMUNITY HEALTH SYSTEMS INC has also vastly surpassed the industry average cash flow growth rate of 10.83%.
  • COMMUNITY HEALTH SYSTEMS INC has improved earnings per share by 7.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, COMMUNITY HEALTH SYSTEMS INC reported lower earnings of $1.62 versus $2.96 in the prior year. This year, the market expects an improvement in earnings ($3.02 versus $1.62).
  • You can view the full analysis from the report here: CYH Ratings Report

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