NEW YORK (
) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and notable return on equity. However, as a counter to these strengths, we also find weaknesses including poor profit margins, weak operating cash flow and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- ELSTER GROUP SE -ADR has improved earnings per share by 20.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, ELSTER GROUP SE -ADR increased its bottom line by earning $0.91 versus $0.62 in the prior year. This year, the market expects an improvement in earnings ($1.15 versus $0.91).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Electronic Equipment, Instruments & Components industry average. The net income increased by 18.7% when compared to the same quarter one year prior, going from $33.79 million to $40.10 million.
- ELT, with its decline in revenue, slightly underperformed the industry average of 5.7%. Since the same quarter one year prior, revenues slightly dropped by 0.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- Net operating cash flow has decreased to $37.78 million or 35.98% when compared to the same quarter last year. Despite a decrease in cash flow of 35.98%, ELSTER GROUP SE -ADR is in line with the industry average cash flow growth rate of -41.03%.
- The gross profit margin for ELSTER GROUP SE -ADR is currently lower than what is desirable, coming in at 32.70%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 8.50% is above that of the industry average.
Elster Group SE provides gas, electricity, and water meters, and related communications, networking, and software solutions to the residential, commercial, and industrial sectors worldwide. The company has a P/E ratio of 16, below the S&P 500 P/E ratio of 17.7. Elster Group SE has a market cap of $1.47 billion and is part of the
industry. Shares are up 12% year to date as of the close of trading on Tuesday.
You can view the full
or get investment ideas from our
-- Written by a member of TheStreet RatingsStaff