NEW YORK (TheStreet) -- Shares of Sequential Brands Group, Inc. (SQBG - Get Report) are up 3.41% to $13.35 in early trading on Monday after Roth Capital Partners boosted its price target to $16.00 from $10.00 and said its purchase of Galaxy Brand Holdings is a move that could be highly accretive.
Separately, TheStreet Ratings team rates SEQUENTIAL BRANDS GROUP INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate SEQUENTIAL BRANDS GROUP INC (SQBG) 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 robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company's return on equity has been disappointing."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- SQBG's very impressive revenue growth greatly exceeded the industry average of 8.3%. Since the same quarter one year prior, revenues leaped by 284.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- SEQUENTIAL BRANDS GROUP INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, SEQUENTIAL BRANDS GROUP INC continued to lose money by earning -$2.19 versus -$2.95 in the prior year. This year, the market expects an improvement in earnings ($0.23 versus -$2.19).
- SQBG's debt-to-equity ratio of 0.70 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that SQBG's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.04 is high and demonstrates strong liquidity.
- 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 Textiles, Apparel & Luxury Goods industry and the overall market, SEQUENTIAL BRANDS GROUP INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- Powered by its strong earnings growth of 101.23% and other important driving factors, this stock has surged by 121.61% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
- You can view the full analysis from the report here: SQBG Ratings Report