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 (
-- Ford Motor
) 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, increase in stock price during the past year and notable return on equity. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 21.6%. Since the same quarter one year prior, revenues slightly increased by 5.3%. 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.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Automobiles industry and the overall market, FORD MOTOR CO's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The gross profit margin for FORD MOTOR CO is rather low; currently it is at 16.70%. 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 4.38% is above that of the industry average.
- Net operating cash flow has significantly decreased to -$361.00 million or 53.61% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
Ford Motor Company engages in the development, manufacture, distribution, and service of vehicles, parts, and accessories worldwide. The company operates through two sectors, Automotive and Financial Services. Ford has a market cap of $51.26 billion and is part of the consumer goods sector and automotive industry. The company has a P/E ratio of 9.4, below the S&P 500 P/E ratio of 17.7. Shares are up 2.1% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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