Valeant Pharmaceuticals International (VRX): Today's Post-Market Laggard

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.

Trade-Ideas LLC identified Valeant Pharmaceuticals International ( VRX) as a post-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified Valeant Pharmaceuticals International as such a stock due to the following factors:

  • VRX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $355.1 million.
  • VRX is down 2% today from today's close.

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More details on VRX:

Valeant Pharmaceuticals International, Inc. develops, manufactures, and markets pharmaceuticals, over-the-counter products, and medical devices worldwide. VRX has a PE ratio of 79. Currently there are 8 analysts that rate Valeant Pharmaceuticals International a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Valeant Pharmaceuticals International has been 1.7 million shares per day over the past 30 days. Valeant Pharmaceuticals International has a market cap of $79.7 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.46 and a short float of 1.9% with 3.20 days to cover. Shares are up 61.9% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Valeant Pharmaceuticals International as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, good cash flow from operations and expanding profit margins. We feel its strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 1.9%. Since the same quarter one year prior, revenues rose by 16.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • VALEANT PHARMACEUTICALS INTL reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, VALEANT PHARMACEUTICALS INTL turned its bottom line around by earning $2.67 versus -$2.62 in the prior year. This year, the market expects an improvement in earnings ($11.10 versus $2.67).
  • 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 426.1% when compared to the same quarter one year prior, rising from -$22.60 million to $73.70 million.
  • Net operating cash flow has slightly increased to $491.10 million or 1.40% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -20.80%.
  • The gross profit margin for VALEANT PHARMACEUTICALS INTL is currently very high, coming in at 77.09%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, VRX's net profit margin of 3.36% significantly trails the industry average.

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