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 robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 15.2%. Since the same quarter one year prior, revenues rose by 27.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- NORTHWEST PIPE CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. 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 ($2.09 versus $1.34).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Construction & Engineering industry. The net income increased by 61.5% when compared to the same quarter one year prior, rising from $2.93 million to $4.73 million.
- Net operating cash flow has significantly increased by 851.12% to $17.69 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 -127.90%.
- Despite currently having a low debt-to-equity ratio of 0.34, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.15 is sturdy.
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 15.2, above the average metals & mining industry P/E ratio of 14.9 and below the S&P 500 P/E ratio of 17.7. Northwest Pipe has a market cap of $219 million and is part of the
industry. Shares are up 4.5% year to date as of the close of trading on Friday.
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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.