Editor's Note: 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.
NEW YORK (
) has been reiterated by TheStreet Ratings as a hold with a ratings score of C+ . The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and a generally disappointing performance in the stock itself.
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Highlights from the ratings report include:
- Despite the fact that TPX's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.73 is high and demonstrates strong liquidity.
- The gross profit margin for TEMPUR PEDIC INTL INC is rather high; currently it is at 53.40%. Regardless of TPX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TPX's net profit margin of 8.80% compares favorably to the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Household Durables industry. The net income has significantly decreased by 45.1% when compared to the same quarter one year ago, falling from $53.08 million to $29.12 million.
- Net operating cash flow has decreased to $41.98 million or 12.94% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
Tempur-Pedic International Inc. engages in the manufacture, marketing, and distribution of bedding products in North America and internationally. It offers mattresses, pillows, and adjustable bed bases, as well as various cushions and other comfort products. The company has a P/E ratio of 10.6, equal to the average consumer durables industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Tempur-Pedic International has a market cap of $1.92 billion and is part of the
industry. Shares are down 38.3% year to date as of the close of trading on Monday.
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--Written by a member of TheStreet Ratings Staff.