NEW YORK (
-- SFN Group
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and revenue growth. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.
Highlights from the ratings report include:
- The gross profit margin for SFN GROUP INC is rather low; currently it is at 20.40%. Regardless of SFN's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 0.50% trails the industry average.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Professional Services industry and the overall market, SFN GROUP INC's return on equity is below that of both the industry average and the S&P 500.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Professional Services industry. The net income increased by 184.8% when compared to the same quarter one year prior, rising from -$3.18 million to $2.69 million.
- SFN GROUP 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, SFN GROUP INC turned its bottom line around by earning $0.27 versus -$0.11 in the prior year. This year, the market expects an improvement in earnings ($0.63 versus $0.27).
SFN Group, Inc., through its subsidiaries, operates as a strategic workforce solutions provider in the United States and Canada. The company operates in two segments, Professional Services and Staffing Services. The company has a P/E ratio of 38, below the average diversified services industry P/E ratio of 50.2 and above the S&P 500 P/E ratio of 16.9. SFN Group has a market cap of $715.5 million and is part of the
industry. Shares are up 13.4% year to date as of the close of trading on Wednesday.
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