NEW YORK (
) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including generally poor debt management and poor profit margins.
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Highlights from the ratings report include:
- SPF's very impressive revenue growth greatly exceeded the industry average of 30.8%. Since the same quarter one year prior, revenues leaped by 57.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Household Durables industry. The net income increased by 157.6% when compared to the same quarter one year prior, rising from -$14.80 million to $8.52 million.
- STANDARD PACIFIC CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. However, the consensus estimates suggest that there will be an upward trend in the coming year. During the past fiscal year, STANDARD PACIFIC CORP reported poor results of -$0.05 versus -$0.04 in the prior year. This year, the market expects an improvement in earnings ($0.20 versus -$0.05).
- The gross profit margin for STANDARD PACIFIC CORP is rather low; currently it is at 20.60%. Regardless of SPF's low profit margin, it has managed to increase from the same period last year.
- The debt-to-equity ratio is very high at 2.16 and currently higher than the industry average, implying that there is very poor management of debt levels within the company.
Standard Pacific Corp. operates as a diversified builder of single-family attached and detached homes in the United States. The company has a P/E ratio of 555, equal to the average materials & construction industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Standard Pacific has a market cap of $1.11 billion and is part of the
industry. Shares are up 74.5% year to date as of the close of trading on Thursday.
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-- Written by a member of TheStreet Ratings Staff
TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.