NEW YORK (
) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and poor profit margins.
Highlights from the ratings report include:
- 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 IT Services industry. The net income has significantly decreased by 189.9% when compared to the same quarter one year ago, falling from -$0.95 million to -$2.75 million.
- The gross profit margin for PFSWEB INC is currently extremely low, coming in at 13.60%. Regardless of PFSW's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, PFSW's net profit margin of -3.60% significantly underperformed when compared to the industry average.
- The debt-to-equity ratio is somewhat low, currently at 0.70, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.80 is somewhat weak and could be cause for future problems.
- PFSWEB INC 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. This trend suggests that the performance of the business is improving. During the past fiscal year, PFSWEB INC continued to lose money by earning -$0.30 versus -$0.46 in the prior year. This year, the market expects an improvement in earnings (-$0.27 versus -$0.30).
- Powered by its strong earnings growth of 150.00% and other important driving factors, this stock has surged by 43.78% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
PFSweb, Inc. provides integrated e-commerce and business process outsourcing solutions to companies in the United States, Canada, and Europe. PFSweb has a market cap of $40.5 million and is part of the
industry. Shares are up 5.8% year to date as of the close of trading on Wednesday.
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