Update (9:40 a.m.): Updated with Wednesday market open information.
NEW YORK (TheStreet) -- Sterne Agee upgraded CARBO Ceramics CRR to "buy" and set a $150 target price. The firm said the company can generate strong earnings growth over the next few years.
The stock was up 2.77% to $129.13 at 9:36 a.m. on Wednesday.
Separately, TheStreet Ratings team rates CARBO CERAMICS INC as a "buy" with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate CARBO CERAMICS INC (CRR) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 8.2%. Since the same quarter one year prior, revenues slightly increased by 7.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- CRR has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.87, which clearly demonstrates the ability to cover short-term cash needs.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 30.10% over the past year, a rise that has exceeded that of the S&P 500 Index. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- Net operating cash flow has increased to $66.33 million or 14.63% when compared to the same quarter last year. Despite an increase in cash flow, CARBO CERAMICS INC's average is still marginally south of the industry average growth rate of 23.06%.
- 36.98% is the gross profit margin for CARBO CERAMICS INC which we consider to be strong. Regardless of CRR's high profit margin, it has managed to decrease from the same period last year. Even though there were mixed results for the gross profit margin, CRR's net profit margin of 12.67% matches the industry average.
- You can view the full analysis from the report here: CRR Ratings Report