NEW YORK ( TheStreet) -- Perry Ellis International (Nasdaq: PERY) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its attractive valuation levels 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:
- Despite currently having a low debt-to-equity ratio of 0.52, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that PERY's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.01 is high and demonstrates strong liquidity.
- ELLIS PERRY INTL INC's earnings per share declined by 35.4% in the most recent quarter compared to the same quarter a year ago. 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, ELLIS PERRY INTL INC reported lower earnings of $1.62 versus $1.71 in the prior year. This year, the market expects an improvement in earnings ($2.00 versus $1.62).
- PERY, with its decline in revenue, underperformed when compared the industry average of 11.3%. Since the same quarter one year prior, revenues slightly dropped by 7.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 35.10%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 35.35% compared to the year-earlier quarter. Looking ahead, the stock's sharp decline over the past year may have been what was needed in order to bring its value into alignment with its fundamentals and others in its industry.
-- Written by a member of TheStreet Ratings Staff