Exide Technologies Inc. Stock Upgraded (XIDE)

NEW YORK ( TheStreet) -- Exide Technologies (Nasdaq: XIDE) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including generally poor debt management, poor profit margins and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • XIDE's revenue growth has slightly outpaced the industry average of 4.0%. Since the same quarter one year prior, revenues slightly increased by 1.0%. 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 Auto Components industry. The net income increased by 80.3% when compared to the same quarter one year prior, rising from -$13.68 million to -$2.70 million.
  • Net operating cash flow has significantly increased by 510.98% to $93.46 million when compared to the same quarter last year. Despite an increase in cash flow of 510.98%, EXIDE TECHNOLOGIES is still growing at a significantly lower rate than the industry average of 4258.11%.
  • Currently the debt-to-equity ratio of 1.93 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with the unfavorable debt-to-equity ratio, XIDE maintains a poor quick ratio of 0.95, which illustrates the inability to avoid short-term cash problems.
  • The gross profit margin for EXIDE TECHNOLOGIES is rather low; currently it is at 18.30%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -0.30% trails that of the industry average.

Exide Technologies engages in the manufacture and supply of lead-acid batteries for transportation and industrial applications in the Americas, Europe, and rest of the world. The company has a P/E ratio of 4.1, equal to the average industrial industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Exide has a market cap of $222.5 million and is part of the industrial goods sector and industrial industry. Shares are up 17.5% year to date as of the close of trading on Wednesday.

You can view the full Exide Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.