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 downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and weak operating cash flow.
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Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 10.7%. Since the same quarter one year prior, revenues rose by 36.0%. 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.
- LIMONEIRA CO has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, LIMONEIRA CO increased its bottom line by earning $0.26 versus $0.12 in the prior year. This year, the market expects an improvement in earnings ($0.52 versus $0.26).
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Food Products industry and the overall market, LIMONEIRA CO's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- The gross profit margin for LIMONEIRA CO is currently lower than what is desirable, coming in at 25.20%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.95% trails that of the industry average.
- Net operating cash flow has significantly decreased to $1.82 million or 62.05% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
Limoneira Company engages in agribusiness and real estate development businesses primarily in the United States. The Company operates in three reportable operating segments; Agribusiness, Rental Operations, and Real Estate Development. The company has a P/E ratio of 84.3, above the S&P 500 P/E ratio of 17.7. Limoneira has a market cap of $245.5 million and is part of the consumer goods sector and food & beverage industry. Shares are up 13% 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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