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NEW YORK (TheStreet) -- Quanex Building Products (NX) has been upgraded by TheStreet Ratings from Hold to Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate QUANEX BUILDING PRODUCTS (NX) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 2.7%. Since the same quarter one year prior, revenues slightly increased by 8.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- NX's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.62, which clearly demonstrates the ability to cover short-term cash needs.
- QUANEX BUILDING PRODUCTS 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. During the past fiscal year, QUANEX BUILDING PRODUCTS continued to lose money by earning -$0.22 versus -$0.45 in the prior year. This year, the market expects an improvement in earnings ($0.34 versus -$0.22).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Building Products industry. The net income increased by 61.9% when compared to the same quarter one year prior, rising from $4.97 million to $8.05 million.
- 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. Compared to other companies in the Building Products industry and the overall market, QUANEX BUILDING PRODUCTS's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: NX Ratings Report
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