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NEW YORK (TheStreet) -- Clearfield (CLFD) - Get Report has been downgraded by TheStreet Ratings from Buy to Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate CLEARFIELD INC (CLFD) 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 largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- CLFD has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 7.40, which clearly demonstrates the ability to cover short-term cash needs.
- CLEARFIELD INC's earnings per share declined by 46.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CLEARFIELD INC increased its bottom line by earning $0.40 versus $0.36 in the prior year. This year, the market expects an improvement in earnings ($0.45 versus $0.40).
- CLFD, with its decline in revenue, slightly underperformed the industry average of 5.3%. Since the same quarter one year prior, revenues fell by 13.4%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 51.18%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 46.66% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, CLFD is still more expensive than most of the other companies in its industry.
- 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 Communications Equipment industry. The net income has significantly decreased by 46.1% when compared to the same quarter one year ago, falling from $1.98 million to $1.07 million.
- You can view the full analysis from the report here: CLFD Ratings Report
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