NEW YORK ( TheStreet) -- Quiksilver (NYSE: ZQK) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and generally poor debt management. Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Textiles, Apparel & Luxury Goods industry. The net income increased by 407.8% when compared to the same quarter one year prior, rising from -$22.06 million to $67.90 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 11.5%. Since the same quarter one year prior, revenues rose by 10.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- After a year of stock price fluctuations, the net result is that ZQK's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Textiles, Apparel & Luxury Goods industry and the overall market, QUIKSILVER INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has decreased to $6.98 million or 30.17% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, QUIKSILVER INC has marginally lower results.
-- Written by a member of TheStreet RatingsStaff