NEW YORK ( TheStreet) -- Dynamic Materials Corporation (Nasdaq: BOOM) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and revenue growth. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor profit margins.
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- DYNAMIC MATERIALS CORP 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. This trend suggests that the performance of the business is improving. During the past fiscal year, DYNAMIC MATERIALS CORP increased its bottom line by earning $0.94 versus $0.40 in the prior year. This year, the market expects an improvement in earnings ($1.26 versus $0.94).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Machinery industry. The net income increased by 223.7% when compared to the same quarter one year prior, rising from $0.75 million to $2.43 million.
- The gross profit margin for DYNAMIC MATERIALS CORP is currently lower than what is desirable, coming in at 31.40%. Regardless of BOOM's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 4.80% trails the industry average.
- BOOM has underperformed the S&P 500 Index, declining 24.20% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
-- Written by a member of TheStreet Ratings Staff