NEW YORK (TheStreet) -- Shares of Arotech Corp. (ARTX) are soaring in pre-market trade, up 22.39% to $4.10, after the defense and security products and services company reported first quarter 2014 net income of $1 million, or 5 cents per share, compared to $616,000, or 3 cents per share, for last year's first quarter.
Analyst estimates were for 1 cent per share.
Revenue was $22.4 million, compared to $22.1 million last year.
The consensus estimate was $21.3 million.
TheStreet Ratings team rates AROTECH CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate AROTECH CORP (ARTX) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- ARTX's debt-to-equity ratio is very low at 0.04 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, ARTX has a quick ratio of 1.53, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has significantly increased by 164.84% to $4.11 million when compared to the same quarter last year. In addition, AROTECH CORP has also vastly surpassed the industry average cash flow growth rate of 33.09%.
- AROTECH CORP's earnings have gone downhill when comparing its most recently reported quarter with the same quarter a year earlier. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, AROTECH CORP turned its bottom line around by earning $0.13 versus -$0.14 in the prior year. This year, the market expects an improvement in earnings ($0.21 versus $0.13).
- The gross profit margin for AROTECH CORP is currently lower than what is desirable, coming in at 30.88%. Regardless of ARTX's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, ARTX's net profit margin of -2.82% significantly underperformed when compared to the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Aerospace & Defense industry. The net income has significantly decreased by 232.5% when compared to the same quarter one year ago, falling from $0.45 million to -$0.59 million.
- You can view the full analysis from the report here: ARTX Ratings Report