Profire Energy Inc Stock Upgraded (PFIE)

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) -- Profire Energy (Nasdaq: PFIE) 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, notable return on equity, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

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Highlights from the ratings report include:
  • PFIE's very impressive revenue growth greatly exceeded the industry average of 20.8%. Since the same quarter one year prior, revenues leaped by 83.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • PFIE has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.26, which clearly demonstrates the ability to cover short-term cash needs.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Energy Equipment & Services industry and the overall market, PROFIRE ENERGY INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • PROFIRE ENERGY INC has improved earnings per share by 25.0% 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, PROFIRE ENERGY INC increased its bottom line by earning $0.12 versus $0.02 in the prior year. This year, the market expects an improvement in earnings ($0.15 versus $0.12).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Energy Equipment & Services industry. The net income increased by 37.6% when compared to the same quarter one year prior, rising from $1.61 million to $2.22 million.

Profire Energy, Inc. designs, assembles, installs, sells, and services oilfield combustion management technologies and related products for the oil and gas industry. Its products and services aid oil and natural gas producers in the production and transportation of oil and natural gas. Profire Energy has a market cap of $197.9 million and is part of the basic materials sector and energy industry. Shares are up 7.1% year to date as of the close of trading on Tuesday.

You can view the full Profire Energy Ratings Report or get investment ideas from our investment research center.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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