Why Revolution Lighting Technologies (RVLT) Stock Is Up Today

NEW YORK (TheStreet) -- Shares of Revolution Lighting Technologies, Inc.   (RVLT) are up 3.91% to $2.39 after it said it now expects second quarter revenue to be be approximately $17.5 million, up from its previous guidance of $15 million to $17 million, to account for its recently completed acquisition of Value Lighting.

Revolution Lighting said it also expects third quarter revenue to be in the $24-$26 million range, and second half 2014 revenue to be in the $55-$60 million range.  

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TheStreet Ratings team rates REVOLUTION LIGHTING TECHNLOGIES as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:

"We rate REVOLUTION LIGHTING TECHNLOGIES (RVLT) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its poor profit margins and generally disappointing historical performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The gross profit margin for REVOLUTION LIGHTING TECHNLOGIES is currently lower than what is desirable, coming in at 33.48%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -70.81% is significantly below that of the industry average.
  • RVLT's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 38.34%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • 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 Electrical Equipment industry and the overall market, REVOLUTION LIGHTING TECHNLOGIES' return on equity significantly trails that of both the industry average and the S&P 500.
  • RVLT, with its decline in revenue, underperformed when compared the industry average of 5.6%. Since the same quarter one year prior, revenues fell by 21.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • RVLT's debt-to-equity ratio is very low at 0.11 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.42 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • You can view the full analysis from the report here: RVLT Ratings Report

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