NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and robust revenue growth. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor profit margins.
Highlights from the ratings report include:
- ASTEC INDUSTRIES INC has improved earnings per share by 20.4% 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 two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, ASTEC INDUSTRIES INC increased its bottom line by earning $1.74 versus $1.42 in the prior year. This year, the market expects an improvement in earnings ($2.23 versus $1.74).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Machinery industry average. The net income increased by 20.7% when compared to the same quarter one year prior, going from $10.14 million to $12.25 million.
- The gross profit margin for ASTEC INDUSTRIES INC is rather low; currently it is at 22.70%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 4.60% trails that of the industry average.
- ASTE has underperformed the S&P 500 Index, declining 18.62% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
Astec Industries, Inc. engages in the design, engineering, manufacture, and marketing of equipment and components for road building, utility, and related construction activities worldwide. The company has a P/E ratio of 15.6, equal to the average industrial industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Astec has a market cap of $651.1 million and is part of the
industry. Shares are down 11.5% year to date as of the close of trading on Friday.
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-- Written by a member of TheStreet Ratings Staff