Rating Change #5
Black Diamond Inc (BDE) 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, expanding profit margins, increase in net income and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 2.2%. Since the same quarter one year prior, revenues rose by 18.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- BDE's debt-to-equity ratio is very low at 0.07 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 4.43, which clearly demonstrates the ability to cover short-term cash needs.
- 42.50% is the gross profit margin for BLACK DIAMOND INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 5.60% is above that of the industry average.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Leisure Equipment & Products industry. The net income increased by 121.7% when compared to the same quarter one year prior, rising from $1.17 million to $2.59 million.
- Net operating cash flow has increased to $0.52 million or 25.66% when compared to the same quarter last year. Despite an increase in cash flow of 25.66%, BLACK DIAMOND INC is still growing at a significantly lower rate than the industry average of 81.73%.
Black Diamond, Inc., together with its subsidiaries, engages in designing, manufacturing, and marketing outdoor performance products for climbing, mountaineering, backpacking, skiing, and other outdoor recreation activities in the United States and internationally. The company has a P/E ratio of 33.9, equal to the average consumer durables industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Black has a market cap of $280.5 million and is part of the consumer goods sector and consumer durables industry. Shares are up 24.1% year to date as of the close of trading on Wednesday.You can view the full Black Ratings Report or get investment ideas from our investment research center.
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