Editor's Note: 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. NEW YORK (TheStreet) -- Noah Education Holdings (NYSE:NED) has been upgraded by TheStreet Ratings from sell 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 also find weaknesses including disappointing return on equity, weak operating cash flow and feeble growth in the company's earnings per share.
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- The revenue growth came in higher than the industry average of 12.5%. Since the same quarter one year prior, revenues rose by 15.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- NED 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. Along with this, the company maintains a quick ratio of 4.98, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for NOAH EDUCATION HOLDINGS -ADR is rather high; currently it is at 58.40%. Regardless of NED's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 1.26% trails the industry average.
- 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 Diversified Consumer Services industry and the overall market, NOAH EDUCATION HOLDINGS -ADR's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to $3.72 million or 54.71% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, NOAH EDUCATION HOLDINGS -ADR has marginally lower results.
-- Written by a member of TheStreet Ratings Staff
Editor's Note: 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. Holiday Special: Subscribe to Action Alerts PLUS to see how Jim Cramer trades his $2.5 Million+ portfolio for 51% off the list price. Your first 14-days are FREE: Sign up today to get e-mail alerts before every trade.
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