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"We rate BROOKS AUTOMATION INC (BRKS) a BUY. This is driven by a few notable 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, expanding profit margins, solid stock price performance 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:
- Despite its growing revenue, the company underperformed as compared with the industry average of 18.5%. Since the same quarter one year prior, revenues rose by 10.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- BRKS's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, BRKS has a quick ratio of 2.13, which demonstrates the ability of the company to cover short-term liquidity needs.
- BROOKS AUTOMATION INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, BROOKS AUTOMATION INC turned its bottom line around by earning $0.02 versus -$0.11 in the prior year. This year, the market expects an improvement in earnings ($0.49 versus $0.02).
- 40.33% is the gross profit margin for BROOKS AUTOMATION INC which we consider to be strong. Regardless of BRKS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BRKS's net profit margin of 0.20% is significantly lower than the industry average.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full analysis from the report here: BRKS Ratings Report