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NEW YORK (TheStreet) -- Allison Transmission (ALSN) 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 ALLISON TRANSMISSION HLDGS (ALSN) a BUY. This is driven by several positive factors, 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, expanding profit margins, good cash flow from operations, compelling growth in net income and notable return on equity. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 2.2%. Since the same quarter one year prior, revenues rose by 18.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The gross profit margin for ALLISON TRANSMISSION HLDGS is rather high; currently it is at 55.59%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 12.43% is above that of the industry average.
- Net operating cash flow has increased to $174.00 million or 32.82% when compared to the same quarter last year. In addition, ALLISON TRANSMISSION HLDGS has also vastly surpassed the industry average cash flow growth rate of -21.91%.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Machinery industry. The net income increased by 54.6% when compared to the same quarter one year prior, rising from $44.50 million to $68.80 million.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Machinery industry and the overall market on the basis of return on equity, ALLISON TRANSMISSION HLDGS has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- You can view the full analysis from the report here: ALSN Ratings Report