Seeking Alpha yesterday wrote that the defense and security products and services company is "significantly undervalued despite being a small and growing firm with promising future bullish catalysts."
It added that "ARTX offers solid fundamentals, highlighted by the Piotroski F-Score, that are rarely seen with companies comparable to it. Taking all into consideration we believe that ARTX is currently undervalued by 50% and are setting a short-term price target of $7.85."
The company is expected to release its fourth quarter and full year 2013 results on Monday, March 31, 2014, following the U.S. markets' close.
TheStreet Ratings team rates AROTECH CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate AROTECH CORP (ARTX) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. 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 and solid stock price performance. However, as a counter to these strengths, we find that the company's profit margins have been poor overall."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- ARTX's revenue growth has slightly outpaced the industry average of 7.3%. Since the same quarter one year prior, revenues slightly increased by 8.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- ARTX's debt-to-equity ratio is very low at 0.12 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.39, which illustrates the ability to avoid short-term cash problems.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. In comparison to the other companies in the Aerospace & Defense industry and the overall market, AROTECH CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- The gross profit margin for AROTECH CORP is currently lower than what is desirable, coming in at 28.70%. Regardless of ARTX's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 3.71% trails the industry average.
- You can view the full analysis from the report here: ARTX Ratings Report