NEW YORK ( TheStreet) -- Rocky Brands (Nasdaq: RCKY) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, attractive valuation levels and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • 39.40% is the gross profit margin for ROCKY BRANDS 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 4.40% trails the industry average.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Textiles, Apparel & Luxury Goods industry. The net income increased by 334.9% when compared to the same quarter one year prior, rising from $0.52 million to $2.28 million.
  • ROCKY BRANDS 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 two years. We feel that this trend should continue. During the past fiscal year, ROCKY BRANDS INC increased its bottom line by earning $1.02 versus $0.21 in the prior year. This year, the market expects an improvement in earnings ($1.43 versus $1.02).
  • Powered by its strong earnings growth of 275.00% and other important driving factors, this stock has surged by 77.36% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, RCKY should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.

Rocky Brands, Inc. designs, manufactures, and markets footwear and apparel under the Rocky, Georgia Boot, Durango, Lehigh, Mossy Oak, and Michelin brand names. The company has a P/E ratio of 9.5, below the average consumer non-durables industry P/E ratio of 10.3 and below the S&P 500 P/E ratio of 17.7. Rocky has a market cap of $93 million and is part of the consumer goods sector and consumer non-durables industry. Shares are up 27.3% year to date as of the close of trading on Wednesday.

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