Gen-Probe, Inc. (GPRO)
- 46.76 (USD)
(+2.0 %)
9/3/2010 11:21:00 AM
GPRO Stock Report
NASDAQ:
GPRO
46.76
(USD)
(2.0 %
)
09/03 11:21 AM
Open
46
Day's Range
46
-
46.94
52Wk Range
37.30 - 51.33
Mkt Cap
2.2 Billion
Vol/Avg
108456/201,828
Div/Yield
0.00%
Key Fundamentals
| Price (11:21 AM) | 46.76 |
|---|---|
| Volume (11:21 AM) | 108456 |
| Last Close Price | 46.76 |
| 10 Day Average Volume | 201,828 |
| 13 Week Price Range | 42.00 - 48.77 |
| 52 Week Price Range | 37.30 - 51.33 |
| LTM Revenue | 517.5 Million |
| Shares Outstanding (12/31/2009) | 49.6 Million |
| Market Capitalization | 2.2 Billion |
| Shares Held By Institutions | 6.1 Million |
| Institutional Holders | 307 |
| % Shares Held By Institutions | 0.00% |
| Earnings Per Share (EPS) | 1.82 |
| P/E Ratio | 22.7273 |
| Book Value Per Share | 16.3306 |
| Gross Margin | 68.75% |
| Annual Dividend | 0 |
| Dividend Yield | 0.00% |
| Beta | 0.916162 |
| Fiscal Year Ends | December |
About Gen-Probe, Inc.
Gen-Probe, Inc.is considered to operate in the Health Care sector. They specifically operate in the Diagnostic Substances business segment contained within the Diagnostics & Medical Research industry.
Gen Probe Inc. was founded in 1983, and was incorporated under the laws of the state of Delaware in 1987. It is involved in the development, manufacture and marketing of rapid, accurate and cost-effective nucleic acid probe-based products used for the clinical diagnosis of human diseases and for screening donated human blood. NATs are designed to detect diseases more rapidly and/or accurately than older tests, and are among the fastest-growing categories of the in vitro diagnostics, or IVD, industry. The Company markets a broad portfolio of products to detect infectious microorganisms, including those causing sexually transmitted diseases, or STDs, tuberculosis, strep throat, and other infections. The Company is committed to quality in its products, operations and people. Its products, design control and manufacturing processes are regulated by numerous third parties, including the United States Food and Drug Administration, or FDA, foreign governments, independent standards auditors and customers. The NAT market developed in response to a need for more rapid, sensitive and specific diagnostic tests for the detection of infectious microorganisms than were previously available using traditional laboratory procedures, such as culture and immunoassays. The customers for its clinical diagnostic products include large reference laboratories, public health institutions and hospitals. Its blood screening collaboration with Novartis accounted for 42% of its total revenues in 2009 and 48% of its total revenues in 2008. The focus of its marketing strategy is to solidify awareness of the superiority of its technology, illustrate the cost effectiveness of this technology and continue to differentiate its products from those of its competitors. The Company has an agreement with bioMérieux S.A., or bioMérieux, for distribution of certain of its microbial non-viral diagnostic products in Europe and various countries in Asia (other than Japan), Australia, South America and Mexico. To establish and protect its proprietary technologies and products, the Company relies on a combination of patent, copyright, trademark and trade secret laws, as well as confidentiality provisions in its contracts. The medical diagnostics and biotechnology industries are subject to intense competition. Its clinical diagnostic products generally are classified in the United States as devices and are regulated by the FDA's Center for Devices and Radiological Health.
Ockham's Rating/Recommendation Summary
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GPRO Revenue
Cash earnings is the most important factor in our analysis, but it goes without saying that if a company cannot produce sales then there is no ability to generate cash flow. By that logic we look very closely at revenue numbers as our second most important factor in valuing a company's stock. We have established reasonable Price to Sales per share ranges based on historical data of the last 9 years. For, GPRO the high and low end of the Price to Sales per share ratios are 7.76x and 4.68x respectively.
Notice that GPRO's current Price to Sales per share ratio is 4.06x, which is quite a bit below what we consider a normal Price to Sales ratio for this stock. Given normal conditions and a price of 42.38, GPRO is 35% below where we would expect to see it. This will beneficially factor into our final analysis of GPRO as it is not often that this stock sinks to these levels.
GPRO Cash Earnings
As the old saying goes, "Cash is King!" We look at reported Cash Earnings, but the main emphasis of our analysis involves stripping out non-cash events such as depreciation from our cash earnings analysis. This helps us view the cash flows more clearly. Nevertheless, an analysis of Cash Earnings (both reported and otherwise) is absolutely pivotal to assessing a company's value, and currently GPRO is significantly below its historical average multiple of Cash Earnings. Looking at the last 9 years we can get a good understanding of what investors have grown to expect from GPRO. For example, GPRO's Cash Earnings ratio per share has fluctuated between 24.38 and 40.18 over this historical timeframe. This range is based upon a proprietary weighted methodology at Ockham, but can clearly show an investor where GPRO is with respect to prior business periods.
So with GPRO's current price (latest close of 42.38) and most recent level of Cash Earnings reported, we see significant opportunity from a value perspective. At its current price level, GPRO is 28% below its average level of Price to Cash Earnings on a historical basis. This means that investors were willing to pay for a much higher stock price than currently for the same level of Cash in the past, on a relative basis. There are a couple of important things to remember, however. First, value doesn't exist in a vacuum. So if the market doesn't recognize this value, even a great disparity in Price to Cash Earnings cannot force an immediate stock price reaction. Second, patience is key when looking at securities that have reached these levels of Price to Cash Earnings versus their historical norms. So be patient with GPRO.
GPRO Dividends
A positive Ockham rating does not require a company to pay out an inviting dividend or a dividend at all. However, we believe dividends provide a useful measure of a company's inherent expectations. Although they may currently pay a dividend, our data source has no historical record of it for GPRO. Since we cannot apply our historical trend analysis to dividends for GPRO we have a neutral score for the dividend portion of our analysis.