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, reasonable valuation levels and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.
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Highlights from the ratings report include:
- DAVE's revenue growth has slightly outpaced the industry average of 1.9%. Since the same quarter one year prior, revenues slightly increased by 2.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- 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 Hotels, Restaurants & Leisure industry and the overall market, FAMOUS DAVES OF AMERICA INC's return on equity is below that of both the industry average and the S&P 500.
- The gross profit margin for FAMOUS DAVES OF AMERICA INC is rather low; currently it is at 16.70%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 2.10% significantly trails the industry average.
Famous Dave's of America, Inc. engages in the development, ownership, operation, and franchising of restaurants under the Famous Dave's name in the United States. The company has a P/E ratio of 16.8, above the average leisure industry P/E ratio of 14.6 and below the S&P 500 P/E ratio of 17.7. Famous Dave's of America has a market cap of $64.4 million and is part of the services sector and leisure industry. Shares are down 20.9% year to date as of the close of trading on Friday.
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-- Written by a member of TheStreet Ratings Staff
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