NEW YORK (
) has been upgraded by TheStreet Ratings from hold to buy. 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, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 8.4%. Since the same quarter one year prior, revenues slightly increased by 2.4%. 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.
- SORL's debt-to-equity ratio is very low at 0.22 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, SORL has a quick ratio of 2.02, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has increased to $4.49 million or 37.61% when compared to the same quarter last year. In addition, SORL AUTO PARTS INC has also vastly surpassed the industry average cash flow growth rate of -62.48%.
- SORL AUTO PARTS INC's earnings per share declined by 43.3% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, SORL AUTO PARTS INC reported lower earnings of $0.86 versus $1.06 in the prior year. This year, the market expects an improvement in earnings ($0.96 versus $0.86).
SORL Auto Parts, Inc., through its principal operating subsidiary, Ruili Group Ruian Auto Parts Co., Ltd., engages in the development, manufacture, and distribution of automotive brake systems and other safety related auto parts for commercial vehicles, such as trucks and buses. The company has a P/E ratio of 3.3, above the average automotive industry P/E ratio of 3.1 and below the S&P 500 P/E ratio of 17.7. SORL Auto Parts has a market cap of $59.8 million and is part of the
industry. Shares are up 41.7% year to date as of the close of trading on Friday.
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-- Written by a member of TheStreet RatingsStaff