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) -- Precision Castparts (NYSE: PCP) has been reiterated by TheStreet Ratings as a buy with a ratings score of A+. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, impressive record of earnings per share growth and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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- The revenue growth came in higher than the industry average of 4.3%. Since the same quarter one year prior, revenues rose by 25.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.39, is low and is below the industry average, implying that there has been successful management of debt levels.
- PRECISION CASTPARTS CORP has improved earnings per share by 22.1% 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. During the past fiscal year, PRECISION CASTPARTS CORP increased its bottom line by earning $9.76 versus $8.45 in the prior year. This year, the market expects an improvement in earnings ($12.12 versus $9.76).
- 35.10% is the gross profit margin for PRECISION CASTPARTS CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 16.98% is above that of the industry average.
- Compared to where it was 12 months ago, this stock has enjoyed a nice rise of 29.55% which was in line with the performance of the S&P 500 Index. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
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