NEW YORK ( TheStreet) -- Crown Crafts (Nasdaq: CRWS) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from the ratings report include:
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • Net operating cash flow has significantly increased by 559.74% to $1.79 million when compared to the same quarter last year. In addition, CROWN CRAFTS INC has also vastly surpassed the industry average cash flow growth rate of -44.88%.
  • Although CRWS's debt-to-equity ratio of 0.20 is very low, it is currently higher than that of the industry average. To add to this, CRWS has a quick ratio of 1.89, which demonstrates the ability of the company to cover short-term liquidity needs.
  • CRWS's revenue growth has slightly outpaced the industry average of 3.2%. Since the same quarter one year prior, revenues slightly increased by 4.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.

Crown Crafts, Inc., through its subsidiaries, offers infant and toddler products primarily in the United States. The company has a P/E ratio of 10.6, below the average consumer non-durables industry P/E ratio of 10.8 and below the S&P 500 P/E ratio of 17.7. Crown Crafts has a market cap of $46.8 million and is part of the consumer goods sector and consumer non-durables industry. Shares are down 4.3% year to date as of the close of trading on Tuesday.

You can view the full Crown Crafts Ratings Report or get investment ideas from our investment research center.
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