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, growth in earnings per share, solid stock price performance, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 12.2%. Since the same quarter one year prior, revenues slightly increased by 3.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- GENERAL ELECTRIC CO's earnings per share improvement from the most recent quarter was slightly positive. 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, GENERAL ELECTRIC CO increased its bottom line by earning $1.23 versus $1.14 in the prior year. This year, the market expects an improvement in earnings ($1.55 versus $1.23).
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 42.89% over the past year, a rise that has exceeded that of the S&P 500 Index. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- Net operating cash flow has slightly increased to $7,751.00 million or 4.12% when compared to the same quarter last year. Despite an increase in cash flow, GENERAL ELECTRIC CO's average is still marginally south of the industry average growth rate of 5.06%.
- The gross profit margin for GENERAL ELECTRIC CO is rather high; currently it is at 52.20%. Regardless of GE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GE's net profit margin of 8.60% compares favorably to the industry average.
General Electric Company operates as a technology and financial services company worldwide. The company has a P/E ratio of 19.2, above the average industrial industry P/E ratio of 18.6 and above the S&P 500 P/E ratio of 17.7. General Electric has a market cap of $233.46 billion and is part of the
industry. Shares are up 23.1% year to date as of the close of trading on Monday.
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--Written by a member of TheStreet Ratings Staff.
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