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NEW YORK (TheStreet) -- Taitron Components (TAIT - Get Report) 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 TAITRON COMPONENTS (TAIT) 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 net income, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electronic Equipment, Instruments & Components industry. The net income increased by 38.0% when compared to the same quarter one year prior, rising from -$0.22 million to -$0.14 million.
- TAIT's debt-to-equity ratio is very low at 0.09 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 3.47, which clearly demonstrates the ability to cover short-term cash needs.
- TAIT, with its decline in revenue, slightly underperformed the industry average of 5.7%. Since the same quarter one year prior, revenues slightly dropped by 3.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The gross profit margin for TAITRON COMPONENTS is currently lower than what is desirable, coming in at 33.19%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, TAIT's net profit margin of -8.51% significantly underperformed when compared to the industry average.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, TAITRON COMPONENTS'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: TAIT Ratings Report