NEW YORK (
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels, good cash flow from operations, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- ESLT's revenue growth has slightly outpaced the industry average of 0.0%. Since the same quarter one year prior, revenues slightly increased by 2.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Net operating cash flow has significantly increased by 56.65% to -$12.13 million when compared to the same quarter last year. In addition, ELBIT SYSTEMS LTD has also vastly surpassed the industry average cash flow growth rate of -28.75%.
- 36.40% is the gross profit margin for ELBIT SYSTEMS LTD which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 5.50% trails the industry average.
- The debt-to-equity ratio is somewhat low, currently at 0.75, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that ESLT's debt-to-equity ratio is low, the quick ratio, which is currently 0.55, displays a potential problem in covering short-term cash needs.
Elbit Systems Ltd. engages in the design, development, manufacture, and integration of defense systems and products worldwide. The company has a P/E ratio of 10.7, below the average aerospace/defense industry P/E ratio of 18.1 and below the S&P 500 P/E ratio of 17.7. Elbit Systems has a market cap of $1.86 billion and is part of the
industry. Shares are down 20.9% year to date as of the close of trading on Thursday.
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