The company announced priced its 2.4 million share public offering at $26 a share. The underwriters of the offering have a 30-day option to buy up to an additional 360,000 shares to cover over-allotments.
Motorcar Parts of America expects net proceeds of about $58.1 million from the offering. The company will use the proceeds for working capital and general corporate purposes.
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TheStreet Ratings team rates MOTORCAR PARTS OF AMER INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate MOTORCAR PARTS OF AMER INC (MPAA) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 9.0%. Since the same quarter one year prior, revenues rose by 25.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- MOTORCAR PARTS OF AMER INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, MOTORCAR PARTS OF AMER INC reported lower earnings of $0.43 versus $1.01 in the prior year. This year, the market expects an improvement in earnings ($1.64 versus $0.43).
- Powered by its strong earnings growth of 2400.00% and other important driving factors, this stock has surged by 177.22% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Auto Components industry and the overall market, MOTORCAR PARTS OF AMER INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- 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 Auto Components industry. The net income has significantly decreased by 96.1% when compared to the same quarter one year ago, falling from $100.98 million to $3.95 million.
- You can view the full analysis from the report here: MPAA Ratings Report
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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.