Rating Change #4
Green Mountain Coffee Roasters Inc. (GMCR) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, impressive record of earnings per share growth and compelling growth in net income. We feel these 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:
- GMCR's very impressive revenue growth greatly exceeded the industry average of 25.5%. Since the same quarter one year prior, revenues leaped by 101.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Although GMCR's debt-to-equity ratio of 0.24 is very low, it is currently higher than that of the industry average. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.03, which illustrates the ability to avoid short-term cash problems.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Food Products industry and the overall market, GREEN MTN COFFEE ROASTERS's return on equity exceeds that of both the industry average and the S&P 500.
- GREEN MTN COFFEE ROASTERS 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, GREEN MTN COFFEE ROASTERS increased its bottom line by earning $1.30 versus $0.57 in the prior year. This year, the market expects an improvement in earnings ($2.68 versus $1.30).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Food Products industry. The net income increased by 4228.9% when compared to the same quarter one year prior, rising from $2.41 million to $104.41 million.
Green Mountain Coffee Roasters, Inc. engages in the specialty coffee and coffee maker business. The company has a P/E ratio of 33.5, below the average food & beverage industry P/E ratio of 38.6 and above the S&P 500 P/E ratio of 17.7. Green Mountain Coffee Roasters has a market cap of $7.84 billion and is part of the consumer goods sector and food & beverage industry. Shares are up 43.3% year to date as of the close of trading on Friday.You can view the full Green Mountain Coffee Roasters Ratings Report or get investment ideas from our investment research center.
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