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"We rate REALD INC (RLD) 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 solid stock price performance, compelling growth in net income and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that revenues have generally been declining."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Powered by its strong earnings growth of 433.33% and other important driving factors, this stock has surged by 42.07% 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.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electronic Equipment, Instruments & Components industry. The net income increased by 458.6% when compared to the same quarter one year prior, rising from -$1.53 million to $5.50 million.
- REALD INC reported significant earnings per share improvement 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, REALD INC reported poor results of -$0.23 versus -$0.20 in the prior year. This year, the market expects an improvement in earnings (-$0.16 versus -$0.23).
- RLD, with its decline in revenue, underperformed when compared the industry average of 6.0%. Since the same quarter one year prior, revenues slightly dropped by 6.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, REALD INC's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: RLD Ratings Report