TSC Ratings provides exclusive stock, ETF and mutual fund ratings and commentary based on award-winning, proprietary tools. Its "safety first" approach to investing aims to reduce risk while seeking solid outperformance on a total return basis.
The following ratings changes were generated on Thursday, April 9.
from sell hold, driven by its solid financial position based on a variety of debt and liquidity measures that we have evaluated. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.
The debt-to-equity ratio of 0.03 is very low but above the industry average. The 1.3 quick ratio illustrates the ability to avoid short-term cash problems. Revenue declined 36.1% since the year-ago quarter. Return on equity also decreased, implying weakness. EPS declined in the most recent quarter compared with the year-ago quarter, and we feel that they should continue to decline in the coming year. Net income fell from $262.4 million in the year-ago quarter to -$132.9 million.
from hold to buy, driven by its net income, revenue growth, notable return on equity, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.
Net income increased 0.7% compared with the same quarter last year, and revenue rose 2.6%. ROE also increased, signaling strength. The 40.3% gross profit margin has increased from the year-ago quarter, and the net profit margin of 5.7% is above the industry average. Net operating cash flow rose 30% to $8.7 million compared with the year-ago quarter.
from hold to buy, driven by its revenue growth, good cash flow from operations, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Revenue rose 9.3% since the same quarter last year. Net operating cash flow rose 21.8% to $47.8 million. EPS were flat in the most recent quarter, but we feel the company is poised for EPS growth in the coming year. The 85.3% gross profit margin has increased from the year-ago quarter. The 16% net profit margin trails the industry average. The 0.6 debt-to-equity ratio is high compared with the industry average. The 2.6 quick ratio demonstrates strong liquidity.
Jack in the Box
from hold to buy, driven by its attractive valuation levels, considering its current price compared to earnings, book value and other measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
EPS declined 18.3% in the most recent quarter compared with the same quarter last year, but we feel the company is poised for EPS growth in the coming year. ROE decreased from the year-ago quarter.
Shares are down 9% over the past year, in part reflecting the market's decline. Although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
from hold to buy, driven by its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, attractive valuation levels and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
EPS improved in the most recent quarter compared with the year-ago quarter, and we feel the company's two-year trend of EPS growth should continue. Net income increased to $36.2 million from -$5.4 million in the year-ago quarter. The 36.1% gross profit margin has increased from the same quarter last year. The 5.2% net profit margin is above the industry average.
Shares have risen over the past year, outperforming the
. It goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
All ratings changes from April 9 are listed below.
Note: Our quantitative model makes stock recommendations based on GAAP figures that may differ materially from data as reported by the companies themselves. As a result, rating changes are occasionally driven by so-called nonrecurring items. As always, we urge readers to use TSC Ratings' reports in conjunction with additional information to construct their opinions on the value that should be placed on any given stock.
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