NEW YORK ( TheStreet) -- Commercial Vehicle Group (Nasdaq: CVGI) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its notable return on equity, robust revenue growth and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, poor profit margins and generally poor debt management. Highlights from the ratings report include:
- Compared to other companies in the Machinery industry and the overall market, COMMERCIAL VEHICLE GROUP INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The revenue growth came in higher than the industry average of 31.8%. Since the same quarter one year prior, revenues rose by 43.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- COMMERCIAL VEHICLE GROUP 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. This trend suggests that the performance of the business is improving. During the past fiscal year, COMMERCIAL VEHICLE GROUP INC turned its bottom line around by earning $0.23 versus -$3.74 in the prior year. This year, the market expects an improvement in earnings ($0.84 versus $0.23).
- The gross profit margin for COMMERCIAL VEHICLE GROUP INC is currently extremely low, coming in at 13.70%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.40% trails that of the industry average.
- CVGI has underperformed the S&P 500 Index, declining 20.21% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.