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"We rate GENERAL FINANCE CORP (GFN) 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 robust revenue growth, compelling growth in net income, impressive record of earnings per share growth, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 6.0%. Since the same quarter one year prior, revenues rose by 22.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Trading Companies & Distributors industry. The net income increased by 301.7% when compared to the same quarter one year prior, rising from $1.16 million to $4.64 million.
- GENERAL FINANCE CORP/DE reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. We anticipate these figures will begin to experience more growth in the coming year. During the past fiscal year, GENERAL FINANCE CORP/DE's EPS of $0.16 remained unchanged from the prior years' EPS of $0.16. This year, the market expects an improvement in earnings ($0.31 versus $0.16).
- The gross profit margin for GENERAL FINANCE CORP/DE is rather high; currently it is at 54.35%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 5.76% trails the industry average.
- Powered by its strong earnings growth of 600.00% and other important driving factors, this stock has surged by 61.73% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- You can view the full analysis from the report here: GFN Ratings Report