NEW YORK ( TheStreet) -- Diebold Incorporated (NYSE: DBD) 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 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:
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- DIEBOLD INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, DIEBOLD INC swung to a loss, reporting -$0.34 versus $1.10 in the prior year. This year, the market expects an improvement in earnings ($2.20 versus -$0.34).
- The revenue fell significantly faster than the industry average of 72.8%. Since the same quarter one year prior, revenues slightly dropped by 5.2%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- DBD's debt-to-equity ratio of 0.85 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.15 is sturdy.
- The gross profit margin for DIEBOLD INC is currently lower than what is desirable, coming in at 30.10%. Regardless of DBD's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, DBD's net profit margin of 5.90% is significantly lower than the same period one year prior.
-- Written by a member of TheStreet RatingsStaff