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 good cash flow from operations 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 relatively poor performance when compared with the S&P 500 during the past year.
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Highlights from the ratings report include:
- Net operating cash flow has significantly increased by 376.21% to $6.74 million when compared to the same quarter last year. In addition, NORTHWEST PIPE CO has also vastly surpassed the industry average cash flow growth rate of 19.02%.
- NORTHWEST PIPE CO's earnings per share declined by 28.3% 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, NORTHWEST PIPE CO turned its bottom line around by earning $1.34 versus -$0.59 in the prior year. This year, the market expects an improvement in earnings ($1.95 versus $1.34).
- NWPX, with its decline in revenue, underperformed when compared the industry average of 9.0%. Since the same quarter one year prior, revenues slightly dropped by 8.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The gross profit margin for NORTHWEST PIPE CO is currently extremely low, coming in at 13.50%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 2.80% is above that of the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Construction & Engineering industry. The net income has significantly decreased by 27.6% when compared to the same quarter one year ago, falling from $4.98 million to $3.60 million.
Northwest Pipe Company manufactures and markets large-diameter, high-pressure steel pipeline systems for use in water infrastructure applications, primarily related to drinking water systems. The company has a P/E ratio of 18.7, above the average metals & mining industry P/E ratio of 15.8 and above the S&P 500 P/E ratio of 17.7. Northwest Pipe has a market cap of $232.2 million and is part of the
industry. Shares are up 12.8% year to date as of the close of trading on Friday.
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-- Written by a member of TheStreet Ratings Staff