Cobra Electronics Corp Stock Upgraded (COBR)

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) -- Cobra Electronics (Nasdaq: COBR) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

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Highlights from the ratings report include:
  • COBR's revenue growth has slightly outpaced the industry average of 11.0%. Since the same quarter one year prior, revenues rose by 12.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Household Durables industry. The net income increased by 104.5% when compared to the same quarter one year prior, rising from -$1.94 million to $0.09 million.
  • The current debt-to-equity ratio, 0.49, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that COBR's debt-to-equity ratio is low, the quick ratio, which is currently 0.61, displays a potential problem in covering short-term cash needs.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Household Durables industry and the overall market, COBRA ELECTRONICS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for COBRA ELECTRONICS CORP is currently lower than what is desirable, coming in at 28.28%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.30% trails that of the industry average.

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