NEW YORK (TheStreet) -- PFSweb (Nasdaq:PFSW) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and poor profit margins. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 0.1%. Since the same quarter one year prior, revenues rose by 14.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- The debt-to-equity ratio is somewhat low, currently at 0.98, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.85 is somewhat weak and could be cause for future problems.
- The gross profit margin for PFSWEB INC is currently extremely low, coming in at 14.50%. Regardless of PFSW's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, PFSW's net profit margin of 0.90% is significantly lower than the same period one year prior.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the IT Services industry and the overall market, PFSWEB INC's return on equity significantly trails that of both the industry average and the S&P 500.
-- Written by a member of TheStreet RatingsStaff
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