Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. NEW YORK ( TheStreet) -- Douglas Dynamics (NYSE: PLOW) has been upgraded by TheStreet Ratings from hold to buy. 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, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
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- PLOW's very impressive revenue growth greatly exceeded the industry average of 17.2%. Since the same quarter one year prior, revenues leaped by 158.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.80, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. To add to this, PLOW has a quick ratio of 1.80, which demonstrates the ability of the company to cover short-term liquidity needs.
- DOUGLAS DYNAMICS INC reported significant earnings per share improvement 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 year. We feel that this trend should continue. During the past fiscal year, DOUGLAS DYNAMICS INC increased its bottom line by earning $0.51 versus $0.26 in the prior year. This year, the market expects an improvement in earnings ($0.90 versus $0.51).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Machinery industry. The net income increased by 921.1% when compared to the same quarter one year prior, rising from -$1.04 million to $8.53 million.
- 38.65% is the gross profit margin for DOUGLAS DYNAMICS INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 11.68% is above that of the industry average.