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
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 compelling growth in net income. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.
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Highlights from the ratings report include:
- XRM's revenue growth has slightly outpaced the industry average of 3.6%. Since the same quarter one year prior, revenues slightly increased by 1.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- XERIUM TECHNOLOGIES INC reported significant earnings per share improvement 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, XERIUM TECHNOLOGIES INC turned its bottom line around by earning $0.25 versus -$1.18 in the prior year. This year, the market expects an improvement in earnings ($0.48 versus $0.25).
- 46.01% is the gross profit margin for XERIUM TECHNOLOGIES INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 0.54% trails the industry average.
- Powered by its strong earnings growth of 111.11% and other important driving factors, this stock has surged by 42.96% 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.
Xerium Technologies, Inc. manufactures and supplies consumable products primarily for the production of paper. The company operates in two segments, Machine Clothing and Roll Covers. Xerium has a market cap of $220.4 million and is part of the industrial goods sector and industrial industry. Shares are down 12.6% year to date as of the close of trading on Friday.
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