NEW YORK ( TheStreet) -- G-III Apparel Group (Nasdaq: GIII) 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, attractive valuation levels, largely solid financial position with reasonable debt levels by most measures and increase in net income. We feel these strengths outweigh the fact that the company shows low profit margins. Highlights from the ratings report include:
- GIII's revenue growth has slightly outpaced the industry average of 13.2%. Since the same quarter one year prior, revenues rose by 13.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- GIII's debt-to-equity ratio of 0.70 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 0.96 is weak.
- G-III APPAREL GROUP LTD reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, G-III APPAREL GROUP LTD increased its bottom line by earning $2.86 versus $1.78 in the prior year. For the next year, the market is expecting a contraction of 12.6% in earnings ($2.50 versus $2.86).
- The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Textiles, Apparel & Luxury Goods industry average. The net income increased by 1.9% when compared to the same quarter one year prior, going from $42.72 million to $43.56 million.
-- Written by a member of TheStreet RatingsStaff