NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. 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 unimpressive growth in net income, poor profit margins and weak operating cash flow.
Highlights from the ratings report include:
- SHLO's revenue growth has slightly outpaced the industry average of 9.4%. Since the same quarter one year prior, revenues rose by 11.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- SHLO's debt-to-equity ratio is very low at 0.29 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.88 is somewhat weak and could be cause for future problems.
- Net operating cash flow has significantly decreased to -$2.52 million or 144.87% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Auto Components industry. The net income has decreased by 17.0% when compared to the same quarter one year ago, dropping from $2.04 million to $1.69 million.
Shiloh Industries, Inc. manufactures and sells first operation blanks, engineered welded blanks, complex stampings, and modular assemblies for the automotive, heavy truck, and other industrial markets in the United States. The company has a P/E ratio of 34, below the average industrial industry P/E ratio of 35.1 and above the S&P 500 P/E ratio of 17.7. Shiloh has a market cap of $176.4 million and is part of the
industry. Shares are down 17.7% year to date as of the close of trading on Friday.
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