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 largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.
Highlights from the ratings report include:
- Although LAKE's debt-to-equity ratio of 0.25 is very low, it is currently higher than that of the industry average. To add to this, LAKE has a quick ratio of 1.93, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has significantly increased by 122.46% to $1.38 million when compared to the same quarter last year. In addition, LAKELAND INDUSTRIES INC has also vastly surpassed the industry average cash flow growth rate of -16.48%.
- The revenue fell significantly faster than the industry average of 11.3%. Since the same quarter one year prior, revenues fell by 18.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing 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. Compared to other companies in the Textiles, Apparel & Luxury Goods industry and the overall market, LAKELAND INDUSTRIES INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for LAKELAND INDUSTRIES INC is currently lower than what is desirable, coming in at 30.00%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -7.70% is significantly below that of the industry average.
Lakeland Industries, Inc., together with its subsidiaries, manufactures and sells safety garments and accessories for the industrial protective clothing market primarily in primarily in North America, China, India, and Brazil. The company has a P/E ratio of 39.8, above the S&P 500 P/E ratio of 17.7. Lakeland has a market cap of $41.5 million and is part of the
industry. Shares are down 14.4% year to date as of the close of trading on Wednesday.
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-- Written by a member of TheStreet Ratings Staff
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.