NEW YORK ( TheStreet) -- Synutra International (Nasdaq: SYUT) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and generally poor debt management. Highlights from the ratings report include:
- SYUT's very impressive revenue growth greatly exceeded the industry average of 3.3%. Since the same quarter one year prior, revenues leaped by 158.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Personal Products industry. The net income increased by 150.2% when compared to the same quarter one year prior, rising from -$20.48 million to $10.29 million.
- SYNUTRA INTERNATIONAL INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SYNUTRA INTERNATIONAL INC reported poor results of -$0.69 versus -$0.45 in the prior year. This year, the market expects an improvement in earnings ($0.35 versus -$0.69).
- SYUT's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 46.21%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
- The debt-to-equity ratio is very high at 2.42 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. To add to this, SYUT has a quick ratio of 0.57, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
-- Written by a member of TheStreet RatingsStaff