NEW YORK (TheStreet) -- Shares of Lumenis Ltd. (LMNS) are advancing by 13.82% to $13.75 on heavy volume in late morning trading on Thursday, after the company that makes energy-based minimally invasive clinical solution products announced it is being acquired by XIO Group for approximately $510 million.
So far today, 2.30 million shares of Lumenis have exchanged hands as compared to its average daily volume of 63,000 shares.
"Over the past 3 years we have managed to transform Lumenis into a strong, growing and profitable company. We have refocused our strategy, introduced new products, and tripled our EBITDA," company CEO Tzipi Ozer-Armon said in a statement announcing the deal.
"Furthermore, we have created a very bright and promising future for Lumenis by building a robust pipeline of innovative products, a strong sales team in each region, and by enhancing our global brand recognition. I am confident that we will continue to thrive and reach new heights together with XIO Group," the CEO continued.
The transaction is expected to close in September of this year.
Separately, TheStreet Ratings team rates LUMENIS LTD as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate LUMENIS LTD (LMNS) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has significantly decreased to $1.31 million or 67.32% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The gross profit margin for LUMENIS LTD is rather high; currently it is at 56.07%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 2.40% trails the industry average.
- This stock has increased by 33.78% over the past year, outperforming the rise in the S&P 500 Index during the same period. Despite the fact that the stock's value has already enjoyed nice gains in the past year, we feel that the risks surrounding an investment in this stock outweigh any potential future returns.
- LUMENIS LTD reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This year, the market expects an improvement in earnings ($0.63 versus $0.35).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Equipment & Supplies industry. The net income increased by 152.5% when compared to the same quarter one year prior, rising from -$3.14 million to $1.65 million.
- You can view the full analysis from the report here: LMNS Ratings Report