NEW YORK ( TheStreet) -- CSS Industries (NYSE: CSS) 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, compelling growth in net income, attractive valuation levels and solid stock price performance. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • CSS's revenue growth has slightly outpaced the industry average of 4.2%. Since the same quarter one year prior, revenues slightly increased by 3.5%. 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.
  • CSS's debt-to-equity ratio is very low at 0.18 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.03, which illustrates the ability to avoid short-term cash problems.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Household Durables industry. The net income increased by 82.9% when compared to the same quarter one year prior, rising from $8.47 million to $15.49 million.
  • CSS INDUSTRIES INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CSS INDUSTRIES INC turned its bottom line around by earning $0.83 versus -$2.46 in the prior year. This year, the market expects an improvement in earnings ($1.10 versus $0.83).

CSS Industries, Inc., a consumer products company, engages in the design, manufacture, procurement, distribution, and sale of seasonal and occasion social expression products principally in the United States and Canada. The company has a P/E ratio of 49.5, below the average specialty retail industry P/E ratio of 50.8 and above the S&P 500 P/E ratio of 17.7. CSS has a market cap of $188.1 million and is part of the services sector and specialty retail industry. Shares are down 3.1% year to date as of the close of trading on Thursday.

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