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NEW YORK (TheStreet) -- Rave Restaurant Group (RAVE) - Get Free Report has been upgraded by TheStreet Ratings from Sell to Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate RAVE RESTAURANT GROUP INC (RAVE) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 9.8%. Since the same quarter one year prior, revenues rose by 12.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- RAVE has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, RAVE has a quick ratio of 2.04, which demonstrates the ability of the company to cover short-term liquidity needs.
- RAVE RESTAURANT GROUP INC reported flat earnings per share in the most recent quarter. Stable Earnings per share over the past year indicate the company has sound management over its earnings and share float. During the past fiscal year, RAVE RESTAURANT GROUP INC's EPS of -$0.15 remained unchanged from the prior years' EPS of -$0.15.
- The gross profit margin for RAVE RESTAURANT GROUP INC is currently extremely low, coming in at 11.97%. Regardless of RAVE's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, RAVE's net profit margin of -2.35% significantly underperformed when compared to the industry average.
- Net operating cash flow has significantly decreased to -$0.74 million or 212.93% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full analysis from the report here: RAVE Ratings Report
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