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NEW YORK (TheStreet) -- Clearfield (CLFD) shares are down -22.8% to $16.05 on Thursday following the release of the company's second quarter earnings report.

Net income for the quarter was 1.23 million, or 9 cents per diluted share, missing analysts quarterly guidance by 2 cents.

The company posted second quarter revenue of 13.21 million, a 26% year over year quarterly increase from 2013.

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TheStreet Ratings team rates CLEARFIELD INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate CLEARFIELD INC (CLFD) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in net income, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • CLFD's very impressive revenue growth greatly exceeded the industry average of 1.1%. Since the same quarter one year prior, revenues leaped by 57.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CLFD 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. Along with this, the company maintains a quick ratio of 5.99, which clearly demonstrates the ability to cover short-term cash needs.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Communications Equipment industry. The net income increased by 263.7% when compared to the same quarter one year prior, rising from $0.55 million to $1.98 million.
  • Net operating cash flow has significantly increased by 12041.07% to $6.80 million when compared to the same quarter last year. In addition, CLEARFIELD INC has also vastly surpassed the industry average cash flow growth rate of 20.01%.
  • 43.90% is the gross profit margin for CLEARFIELD INC which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, CLFD's net profit margin of 12.27% significantly trails the industry average.
  • You can view the full analysis from the report here: CLFD Ratings Report

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