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 downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and poor profit margins.
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Highlights from the ratings report include:
- GFF's revenue growth has slightly outpaced the industry average of 3.2%. Since the same quarter one year prior, revenues slightly increased by 7.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Net operating cash flow has increased to -$24.69 million or 25.09% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -7.88%.
- GRIFFON CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GRIFFON CORP reported lower earnings of $0.11 versus $0.30 in the prior year. This year, the market expects an improvement in earnings ($0.45 versus $0.11).
- 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. Compared to other companies in the Building Products industry and the overall market, GRIFFON CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for GRIFFON CORP is currently lower than what is desirable, coming in at 26.97%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.71% trails that of the industry average.
Griffon Corporation is engaged in home and building, telephonics, and plastics businesses. Griffon has a market cap of $680.4 million and is part of the industrial goods sector and materials & construction industry. Shares are down 5.3% year to date as of the close of trading on Friday.
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