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NEW YORK (TheStreet) -- Rofin Sinar Technologies (RSTI) 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 ROFIN SINAR TECHNOLOGIES INC (RSTI) a BUY. This is driven by a number of 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 largely solid financial position with reasonable debt levels by most measures, expanding profit margins, growth in earnings per share, increase in stock price during the past year and increase in net income. 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:
- RSTI's debt-to-equity ratio is very low at 0.03 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 2.50, which clearly demonstrates the ability to cover short-term cash needs.
- 36.84% is the gross profit margin for ROFIN SINAR TECHNOLOGIES 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 8.19% trails the industry average.
- ROFIN SINAR TECHNOLOGIES INC has improved earnings per share by 22.9% in the most recent quarter compared to 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, ROFIN SINAR TECHNOLOGIES INC reported lower earnings of $0.90 versus $1.24 in the prior year. This year, the market expects an improvement in earnings ($1.60 versus $0.90).
- RSTI, with its decline in revenue, slightly underperformed the industry average of 1.9%. Since the same quarter one year prior, revenues slightly dropped by 1.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. 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: RSTI Ratings Report