NEW YORK ( TheStreet) -- Kirkland's (Nasdaq: KIRK) 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, reasonable valuation levels, good cash flow from operations and expanding profit margins. 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:
  • The revenue growth came in higher than the industry average of 6.5%. Since the same quarter one year prior, revenues slightly increased by 4.7%. 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.
  • Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.37 is sturdy.
  • Net operating cash flow has significantly increased by 112.50% to $3.69 million when compared to the same quarter last year. In addition, KIRKLAND'S INC has also vastly surpassed the industry average cash flow growth rate of 11.73%.
  • 37.20% is the gross profit margin for KIRKLAND'S INC which we consider to be strong. Regardless of KIRK's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 1.30% trails the industry average.

Kirkland's, Inc. operates as a specialty retailer of home decor and gifts in the United States. The company has a P/E ratio of 14.3, below the average retail industry P/E ratio of 14.4 and below the S&P 500 P/E ratio of 17.7. Kirkland's has a market cap of $271.3 million and is part of the services sector and retail industry. Shares are down 9.6% year to date as of the close of trading on Monday.

You can view the full Kirkland's Ratings Report or get investment ideas from our investment research center.
null

If you liked this article you might like

Week Ahead: With Trump Out of Washington, the Focus Returns to Fed Forecasts

Week Ahead: Jobs Report Captures Spotlight as Wall Street Assesses Chances of March Hike

Week Ahead: Packed Economic Calendar in Shortened Thanksgiving Week