Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model
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 revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share and unimpressive growth in net income.
- ACTIVE STOCK TRADERS: Get full access to Jim Cramer's thoughts for less than $3/week - sometimes before he says them on TV! Start with a 14-Day Free Trial.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 0.8%. Since the same quarter one year prior, revenues rose by 12.6%. 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.
- BDE's debt-to-equity ratio is very low at 0.07 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.88, which clearly demonstrates the ability to cover short-term cash needs.
- 42.50% is the gross profit margin for BLACK DIAMOND INC which we consider to be strong. Regardless of BDE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BDE's net profit margin of -6.00% significantly underperformed when compared to the industry average.
- BLACK DIAMOND INC's earnings per share declined by 50.0% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, BLACK DIAMOND INC reported lower earnings of $0.22 versus $2.86 in the prior year. For the next year, the market is expecting a contraction of 75.0% in earnings ($0.06 versus $0.22).
- 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 Leisure Equipment & Products industry. The net income has significantly decreased by 135.3% when compared to the same quarter one year ago, falling from -$0.81 million to -$1.91 million.
Black Diamond, Inc., together with its subsidiaries, engages in designing, manufacturing, and marketing outdoor performance products for climbing, mountaineering, backpacking, skiing, and other outdoor recreation activities in the United States and internationally. The company has a P/E ratio of 39.7, above the average consumer durables industry P/E ratio of 35 and above the S&P 500 P/E ratio of 17.7. Black has a market cap of $273.9 million and is part of the
industry. Shares are up 17% year to date as of the close of trading on Monday.
You can view the full
or get investment ideas from our
-- Written by a member of TheStreet Ratings Staff
FREE from Real Money's Jim Cramer: Winners and Losers Election 2012 - Steps to take NOW so you can profit no matter who is in charge!
Free download now