NEW YORK (TheStreet) -- Shares of Ennis Inc. (EBF - Get Report) closed lower -1.15% to $15.41 after the company, which is primarily engaged in the production and sale of business forms, apparel, and other business products, reported a decline in net income for the 2014 first quarter to $8 million, or 31 cents per share, compared to $8.5 million, or 33 cents per share from the year ago period.
However, Ennis did report an increase in revenue for the most recent quarter to $141.2 million, from $138.5 million for the 2013 first quarter.
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"We rate ENNIS INC (EBF) 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 reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
Separately, TheStreet Ratings team rates ENNIS INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
- EBF's revenue growth has slightly outpaced the industry average of 3.9%. Since the same quarter one year prior, revenues slightly increased by 6.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- EBF's debt-to-equity ratio is very low at 0.29 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, EBF has a quick ratio of 1.65, which demonstrates the ability of the company to cover short-term liquidity needs.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Commercial Services & Supplies industry. The net income has significantly decreased by 304.5% when compared to the same quarter one year ago, falling from $7.07 million to -$14.47 million.
- 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 Commercial Services & Supplies industry and the overall market, ENNIS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: EBF Ratings Report