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"We rate BLACK BOX CORP (BBOX) 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. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 4.1%. Since the same quarter one year prior, revenues slightly dropped by 0.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Despite currently having a low debt-to-equity ratio of 0.49, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.14 is sturdy.
- BLACK BOX CORP's earnings per share declined by 41.9% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, BLACK BOX CORP swung to a loss, reporting -$7.45 versus $1.73 in the prior year. This year, the market expects an improvement in earnings ($2.21 versus -$7.45).
- The gross profit margin for BLACK BOX CORP is currently lower than what is desirable, coming in at 31.38%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.60% significantly trails the industry average.
- Net operating cash flow has significantly decreased to -$5.88 million or 128.63% 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: BBOX Ratings Report