NEW YORK (
-- Core Molding Technologies
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, increase in net income and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins.
Highlights from the ratings report include:
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Chemicals industry. The net income increased by 4.7% when compared to the same quarter one year prior, going from $1.74 million to $1.82 million.
- CORE MOLDING TECHNOLOGIES reported flat earnings per share in the most recent quarter. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, CORE MOLDING TECHNOLOGIES increased its bottom line by earning $0.33 versus $0.16 in the prior year.
- Compared to its closing price of one year ago, CMT's share price has jumped by 57.88%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, CMT should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The current debt-to-equity ratio, 0.47, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.25, which illustrates the ability to avoid short-term cash problems.
- The revenue growth came in higher than the industry average of 19.7%. Since the same quarter one year prior, revenues rose by 33.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
Core Molding Technologies, Inc., together with its subsidiaries, operates as a compounder of sheet molding composite (SMC) and molder of fiberglass reinforced plastics in the United States, Canada, and Mexico. The company has a P/E ratio of 23.9, equal to the average consumer non-durables industry P/E ratio and above the S&P 500 P/E ratio of 16.5. Core Molding has a market cap of $57.7 million and is part of the
industry. Shares are up 37.3% year to date as of the close of trading on Monday.
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