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Mistras Group Inc. Stock Downgraded (MG)

NEW YORK (TheStreet) -- Mistras Group (NYSE:MG) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 14.6%. Since the same quarter one year prior, revenues rose by 31.4%. 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, 0.33, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, MG has a quick ratio of 1.70, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Professional Services industry and the overall market, MISTRAS GROUP INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • The gross profit margin for MISTRAS GROUP INC is currently lower than what is desirable, coming in at 32.20%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 2.90% trails that of the industry average.

Mistras Group, Inc. provides technology-enabled asset protection solutions to evaluate the structural integrity and reliability of critical energy, industrial, and public infrastructure worldwide. The company has a P/E ratio of 33.5, above the average diversified services industry P/E ratio of 29 and above the S&P 500 P/E ratio of 17.7. Mistras Group has a market cap of $607.9 million and is part of the services sector and diversified services industry. Shares are down 14.6% year to date as of the close of trading on Friday.

You can view the full Mistras Group Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

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