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 reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and poor profit margins.
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Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 28.7%. Since the same quarter one year prior, revenues rose by 11.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- CSS 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. To add to this, CSS has a quick ratio of 2.12, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has increased to -$24.03 million or 44.76% when compared to the same quarter last year. Despite an increase in cash flow of 44.76%, CSS INDUSTRIES INC is still growing at a significantly lower rate than the industry average of 187.74%.
- The gross profit margin for CSS INDUSTRIES INC is currently lower than what is desirable, coming in at 31.40%. Regardless of CSS's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of -1.50% trails the industry average.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Household Durables industry and the overall market, CSS INDUSTRIES INC's return on equity is below that of both the industry average and the S&P 500.
CSS Industries, Inc., a consumer products company, engages in the design, manufacture, procurement, distribution, and sale of seasonal and occasion social expression products principally to mass market retailers in the United States and Canada. The company has a P/E ratio of 9.9, above the average specialty retail industry P/E ratio of 8.3 and below the S&P 500 P/E ratio of 17.7. CSS has a market cap of $183.6 million and is part of the
industry. Shares are down 4.3% year to date as of the close of trading on Friday.
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-- Written by a member of TheStreet Ratings Staff