NEW YORK (TheStreet) -- Tempur-Pedic International (NYSE:TPX) 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, notable return on equity and solid stock price performance. However, as a counter to these strengths, we find that the company has not been very careful in the management of its balance sheet. Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 22.7%. Since the same quarter one year prior, revenues rose by 25.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 27.27% and other important driving factors, this stock has surged by 40.64% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- The gross profit margin for TEMPUR PEDIC INTL INC is rather high; currently it is at 54.60%. Regardless of TPX's high profit margin, it has managed to decrease from the same period last year.
- The debt-to-equity ratio is very high at 19.00 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. Even though the debt-to-equity ratio is weak, TPX's quick ratio is somewhat strong at 1.39, demonstrating the ability to handle short-term liquidity needs.
Latest Headlines about TPX
Latest from TheStreet Wire
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV