NEW YORK ( TheStreet) -- Kandi Technologies Corporation (Nasdaq: KNDI) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor profit margins. Highlights from the ratings report include:
- KNDI's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 41.07%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, KNDI is still more expensive than most of the other companies in its industry.
- The gross profit margin for KANDI TECHNOLOGIES CORP is rather low; currently it is at 24.70%. It has decreased from the same quarter the previous year. Despite the weak results of the gross profit margin, the net profit margin of 71.20% has significantly outperformed against the industry average.
- KANDI TECHNOLOGIES CORP 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, KANDI TECHNOLOGIES CORP swung to a loss, reporting -$0.05 versus $0.05 in the prior year.
- Despite its growing revenue, the company underperformed as compared with the industry average of 5.4%. Since the same quarter one year prior, revenues slightly increased by 1.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Automobiles industry. The net income increased by 3435.9% when compared to the same quarter one year prior, rising from -$0.18 million to $5.94 million.