I agree with the warmup procedure...then once it's warm, remove all plugs before doing the test so the engine spins more freely. A quick way to see if your rings are shot, is add a teaspoon of motor oil into the cylinder with a turkey-baster & repeat the compression test. If it goes up a LOT, you might want to consider re-ringing & honing. 125 sounds like it's in the mid-to-low range of acceptable to me...and if it don't smoke, just RIDE it. I'm thinking you should would have 140-175 if everything was new. Might also want to try adjusting those valves before the test.
Josh