NEW YORK ( TheStreet) -- American Woodmark Corporation (Nasdaq: AMWD) 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, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.
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- AMWD's revenue growth has slightly outpaced the industry average of 5.8%. Since the same quarter one year prior, revenues slightly increased by 9.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- AMWD's debt-to-equity ratio is very low at 0.19 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, AMWD has a quick ratio of 1.67, which demonstrates the ability of the company to cover short-term liquidity needs.
- After a year of stock price fluctuations, the net result is that AMWD's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- The gross profit margin for AMERICAN WOODMARK CORP is rather low; currently it is at 17.30%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -4.40% trails that of the industry average.
- Net operating cash flow has significantly decreased to $2.63 million or 52.01% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
-- Written by a member of TheStreet Ratings Staff