NEW YORK ( TheStreet) -- American Pacific Corporation (Nasdaq: APFC) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, disappointing return on equity and poor profit margins. Highlights from the ratings report include:
- 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 Chemicals industry. The net income has significantly decreased by 208.7% when compared to the same quarter one year ago, falling from $1.12 million to -$1.21 million.
- The gross profit margin for AMERICAN PACIFIC CORP is currently lower than what is desirable, coming in at 32.20%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -2.90% is significantly below that of the industry average.
- AMERICAN PACIFIC CORP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, AMERICAN PACIFIC CORP continued to lose money by earning -$0.43 versus -$0.80 in the prior year.
- Net operating cash flow has significantly increased by 300.39% to $7.04 million when compared to the same quarter last year. In addition, AMERICAN PACIFIC CORP has also vastly surpassed the industry average cash flow growth rate of -57.74%.
- Compared to its closing price of one year ago, APFC's share price has jumped by 37.70%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.