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NEW YORK (TheStreet) -- Carrols Restaurant Group (TAST) has been upgraded by TheStreet Ratings from Sell to Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate CARROLS RESTAURANT GROUP INC (TAST) 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 increase in stock price during the past year, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- CARROLS RESTAURANT GROUP 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. This trend suggests that the performance of the business is improving. During the past fiscal year, CARROLS RESTAURANT GROUP INC continued to lose money by earning -$0.59 versus -$0.83 in the prior year. This year, the market expects an improvement in earnings (-$0.40 versus -$0.59).
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 5.6%. Since the same quarter one year prior, revenues slightly dropped by 2.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The gross profit margin for CARROLS RESTAURANT GROUP INC is rather low; currently it is at 16.02%. Regardless of TAST's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, TAST's net profit margin of -1.14% significantly underperformed when compared to the industry average.
- Net operating cash flow has significantly decreased to -$2.21 million or 566.66% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full analysis from the report here: TAST Ratings Report
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