Endo Pharmaceutical Holdings (Nasdaq:ENDP) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally poor debt management and disappointing return on equity.
Highlights from the ratings report include:
The revenue growth came in higher than the industry average of 5.4%. Since the same quarter one year prior, revenues rose by 23.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
The gross profit margin for ENDO PHARMACEUTICALS HLDGS is currently very high, coming in at 73.10%. 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 -12.60% is in-line with the industry average.
ENDO PHARMACEUTICALS HLDGS has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, ENDO PHARMACEUTICALS HLDGS reported lower earnings of $1.54 versus $2.18 in the prior year. This year, the market expects an improvement in earnings ($5.10 versus $1.54).
Net operating cash flow has significantly decreased to -$13.06 million or 109.96% 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 share price of ENDO PHARMACEUTICALS HLDGS has not done very well: it is down 11.50% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry. .
Endo Pharmaceuticals Holdings Inc. operates as a specialty healthcare solutions company in the United States and internationally. The company has a P/E ratio of 22.7, equal to the average drugs industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Endo has a market cap of $4.11 billion and is part of the health care sector and drugs industry. Shares are up 0.4% year to date as of the close of trading on Wed