Editor's Note: 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. NEW YORK ( TheStreet) -- Black Diamond (Nasdaq: BDE) has been upgraded by TheStreet Ratings from hold to buy. 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, good cash flow from operations, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.
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- The revenue growth came in higher than the industry average of 2.5%. Since the same quarter one year prior, revenues rose by 12.6%. 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.
- BDE's debt-to-equity ratio is very low at 0.07 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.88, which clearly demonstrates the ability to cover short-term cash needs.
- Net operating cash flow has significantly increased by 383.95% to $1.15 million when compared to the same quarter last year. Despite an increase in cash flow of 383.95%, BLACK DIAMOND INC is still growing at a significantly lower rate than the industry average of 907.58%.
- 42.50% is the gross profit margin for BLACK DIAMOND INC which we consider to be strong. Regardless of BDE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BDE's net profit margin of -6.00% significantly underperformed when compared to the industry average.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Leisure Equipment & Products industry and the overall market, BLACK DIAMOND INC's return on equity significantly trails that of both the industry average and the S&P 500.
-- Written by a member of TheStreet Ratings Staff