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"We rate AMERISOURCEBERGEN CORP (ABC) 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 robust revenue growth, increase in net income, good cash flow from operations, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- ABC's revenue growth has slightly outpaced the industry average of 19.5%. Since the same quarter one year prior, revenues rose by 29.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- 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 32.9% when compared to the same quarter one year prior, rising from $51.02 million to $67.80 million.
- Net operating cash flow has significantly increased by 2784.82% to $830.66 million when compared to the same quarter last year. In addition, AMERISOURCEBERGEN CORP has also vastly surpassed the industry average cash flow growth rate of -26.60%.
- Powered by its strong earnings growth of 31.81% and other important driving factors, this stock has surged by 30.08% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- AMERISOURCEBERGEN CORP has improved earnings per share by 31.8% 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, AMERISOURCEBERGEN CORP reported lower earnings of $1.20 versus $2.10 in the prior year. This year, the market expects an improvement in earnings ($4.41 versus $1.20).
- You can view the full analysis from the report here: ABC Ratings Report