NEW YORK (TheStreet) -- LSI Industries (Nasdaq:LYTS) has been downgraded by TheStreet Ratings from buy to hold. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity. Highlights from the ratings report include:
- LYTS has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 3.4%. Since the same quarter one year prior, revenues slightly dropped by 2.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- LSI INDUSTRIES INC has exprienced 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. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, LSI INDUSTRIES INC increased its bottom line by earning $0.45 versus $0.07 in the prior year. For the next year, the market is expecting a contraction of 58.9% in earnings ($0.19 versus $0.45).
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Electrical Equipment industry and the overall market, LSI INDUSTRIES INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for LSI INDUSTRIES INC is rather low; currently it is at 21.20%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -0.60% trails that of the industry average.
-- Written by a member of TheStreet Ratings Staff
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