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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, impressive record of earnings per share growth and good cash flow from operations. However, as a counter to these strengths, we find that the growth in the company's net income has been quite unimpressive.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 5.6%. Since the same quarter one year prior, revenues rose by 18.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- VIRCO MFG. CORP has improved earnings per share by 16.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, VIRCO MFG. CORP continued to lose money by earning -$0.13 versus -$0.27 in the prior year. This year, the market expects an improvement in earnings ($0.08 versus -$0.13).
- The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Commercial Services & Supplies industry and the overall market, VIRCO MFG. CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Commercial Services & Supplies industry average, but is greater than that of the S&P 500. The net income increased by 13.3% when compared to the same quarter one year prior, going from -$4.45 million to -$3.86 million.
Virco Mfg. Corporation is engaged in the design, production, and distribution of furniture for the commercial and education markets in the United States. Virco has a market cap of $38.7 million and is part of the consumer goods sector and consumer durables industry. Shares are up 15.5% year to date as of the close of trading on Tuesday.
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