NEW YORK ( TheStreet) -- Snyders-Lance (Nasdaq: LNCE) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income. Highlights from the ratings report include:
- LNCE's very impressive revenue growth greatly exceeded the industry average of 23.7%. Since the same quarter one year prior, revenues leaped by 77.5%. 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.
- 36.80% is the gross profit margin for SNYDERS-LANCE INC which we consider to be strong. Regardless of LNCE'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 2.10% trails the industry average.
- Despite currently having a low debt-to-equity ratio of 0.34, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.86 is weak.
- SNYDERS-LANCE INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, SNYDERS-LANCE INC reported lower earnings of $0.19 versus $1.11 in the prior year. This year, the market expects an improvement in earnings ($0.75 versus $0.19).
- The share price of SNYDERS-LANCE INC has not done very well: it is down 5.19% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it is one of the factors that makes this stock an attractive investment.