NEW YORK ( TheStreet) -- Zoltek Companies (Nasdaq: ZOLT) 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, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself. Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 3.8%. Since the same quarter one year prior, revenues rose by 43.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- ZOLT's debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, ZOLT has a quick ratio of 1.71, which demonstrates the ability of the company to cover short-term liquidity needs.
- ZOLTEK COS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ZOLTEK COS INC continued to lose money by earning -$0.10 versus -$0.17 in the prior year. This year, the market expects an improvement in earnings ($0.66 versus -$0.10).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Chemicals industry. The net income increased by 721.6% when compared to the same quarter one year prior, rising from -$1.56 million to $9.70 million.
- 37.40% is the gross profit margin for ZOLTEK COS INC which we consider to be strong. It has increased significantly from the same period last year. Along with this, the net profit margin of 20.60% significantly outperformed against the industry average.
-- Written by a member of TheStreet RatingsStaff