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"We rate FONAR CORP (FONR) 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 solid stock price performance, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to its closing price of one year ago, FONR's share price has jumped by 141.60%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, FONR should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The current debt-to-equity ratio, 0.45, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, FONR has a quick ratio of 1.82, which demonstrates the ability of the company to cover short-term liquidity needs.
- 45.09% is the gross profit margin for FONAR CORP which we consider to be strong. Regardless of FONR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, FONR's net profit margin of 23.94% significantly outperformed against the industry.
- FONR, with its decline in revenue, underperformed when compared the industry average of 7.8%. Since the same quarter one year prior, revenues slightly dropped by 7.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: FONR Ratings Report
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