Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link
NEW YORK (
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. 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:
- GLPW's debt-to-equity ratio is very low at 0.08 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.53, which clearly demonstrates the ability to cover short-term cash needs.
- GLOBAL POWER EQUIPMENT GROUP's earnings per share declined by 24.7% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, GLOBAL POWER EQUIPMENT GROUP reported lower earnings of $0.67 versus $1.04 in the prior year. This year, the market expects an improvement in earnings ($0.91 versus $0.67).
- GLPW, with its decline in revenue, underperformed when compared the industry average of 5.7%. Since the same quarter one year prior, revenues slightly dropped by 7.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- The gross profit margin for GLOBAL POWER EQUIPMENT GROUP is rather low; currently it is at 22.04%. Regardless of GLPW's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 7.75% trails the industry average.
Global Power Equipment Group Inc. provides customer-engineered equipment, and modification and maintenance services primarily in the United States, Canada, Europe, Mexico, Asia, the Middle East, and South America. Global Power Equipment Group has a market cap of $335.8 million and is part of the industrial goods sector and industrial industry. Shares are down 0.4% year to date as of the close of trading on Thursday.
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