Jamba Inc. Stock Upgraded (JMBA)

NEW YORK ( TheStreet) -- Jamba (Nasdaq: JMBA) 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 solid stock price performance. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 0.1%. Since the same quarter one year prior, revenues rose by 12.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Hotels, Restaurants & Leisure industry average. The net income increased by 17.4% when compared to the same quarter one year prior, going from $3.93 million to $4.62 million.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. 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 company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, JAMBA INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for JAMBA INC is currently lower than what is desirable, coming in at 28.20%. Regardless of JMBA'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 7.00% trails the industry average.

Jamba, Inc., through its subsidiary, Jamba Juice Company, owns and franchises Jamba Juice stores. Jamba has a market cap of $173.7 million and is part of the services sector and leisure industry. Shares are up 89.3% year to date as of the close of trading on Friday.

You can view the full Jamba 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.
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