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 reiterated by TheStreet Ratings as a buy with a ratings score of B . 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, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
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Highlights from the ratings report include:
- EL's revenue growth has slightly outpaced the industry average of 3.2%. Since the same quarter one year prior, revenues slightly increased by 9.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- 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 1.13, which illustrates the ability to avoid short-term cash problems.
- LAUDER (ESTEE) COS INC has improved earnings per share by 30.0% 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 two years. We feel that this trend should continue. During the past fiscal year, LAUDER (ESTEE) COS INC increased its bottom line by earning $2.16 versus $1.74 in the prior year. This year, the market expects an improvement in earnings ($2.57 versus $2.16).
- 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 Personal Products industry average. The net income increased by 24.6% when compared to the same quarter one year prior, going from $41.10 million to $51.20 million.
- The gross profit margin for LAUDER (ESTEE) COS INC is currently very high, coming in at 84.10%. 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 2.30% trails the industry average.
The Estee Lauder Companies Inc. engages in the manufacture, marketing, and sale of skin care, makeup, fragrance, and hair care products worldwide. The company has a P/E ratio of 28.4, equal to the average consumer non-durables industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Estee Lauder Cos has a market cap of $14.46 billion and is part of the
industry. Shares are up 9.4% year to date as of the close of trading on Tuesday.
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--Written by a member of TheStreet Ratings Staff.
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