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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, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and poor profit margins.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 0.5%. Since the same quarter one year prior, revenues rose by 15.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- TOF has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, TOF has a quick ratio of 1.92, which demonstrates the ability of the company to cover short-term liquidity needs.
- TOFUTTI BRANDS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, TOFUTTI BRANDS INC swung to a loss, reporting -$0.16 versus $0.02 in the prior year.
- The gross profit margin for TOFUTTI BRANDS INC is currently lower than what is desirable, coming in at 34.94%. Regardless of TOF'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 4.22% trails the industry average.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Food Products industry and the overall market, TOFUTTI BRANDS INC's return on equity significantly trails that of both the industry average and the S&P 500.
Tofutti Brands Inc. engages in the development, production, and marketing of nondairy frozen desserts and other food products under the TOFUTTI brand name in the United States and internationally. Tofutti has a market cap of $16.4 million and is part of the consumer goods sector and food & beverage industry. Shares are up 174.1% year to date as of the close of trading on Tuesday.
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