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"We rate ROCKY BRANDS INC (RCKY) 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, attractive valuation levels, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- RCKY's revenue growth trails the industry average of 16.7%. Since the same quarter one year prior, revenues slightly increased by 3.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The current debt-to-equity ratio, 0.38, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, RCKY has a quick ratio of 2.50, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has increased to -$4.96 million or 23.12% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 0.36%.
- 35.71% is the gross profit margin for ROCKY BRANDS INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 4.31% trails the industry average.
- You can view the full analysis from the report here: RCKY Ratings Report