NEW YORK (TheStreet) -- Ethan Allen Interiors (ETH - Get Report) shares had coverage initiated with a "buy" rating and a $30 price target by analysts at Gabelli (GAB) on Monday.
Ethan Allen shares are up 3.2% to $25.58 in early market trading today.
The price target represents a 21.1% upside for the stock's closing price on Friday.
TheStreet Ratings team rates ETHAN ALLEN INTERIORS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate ETHAN ALLEN INTERIORS INC (ETH) 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 increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the Household Durables industry average, but is less than that of the S&P 500. The net income increased by 20.2% when compared to the same quarter one year prior, going from $4.37 million to $5.26 million.
- ETH's revenue growth trails the industry average of 17.3%. Since the same quarter one year prior, revenues slightly increased by 2.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The current debt-to-equity ratio, 0.37, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.94 is somewhat weak and could be cause for future problems.
- ETHAN ALLEN INTERIORS INC has improved earnings per share by 20.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ETHAN ALLEN INTERIORS INC reported lower earnings of $1.12 versus $1.70 in the prior year. This year, the market expects an improvement in earnings ($1.36 versus $1.12).
- The gross profit margin for ETHAN ALLEN INTERIORS INC is rather high; currently it is at 56.46%. Regardless of ETH's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ETH's net profit margin of 3.03% compares favorably to the industry average.
- You can view the full analysis from the report here: ETH Ratings Report