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) -- Dynamic Materials Corporation (Nasdaq:BOOM) 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 deteriorating net income, disappointing return on equity and poor profit margins.
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- BOOM's debt-to-equity ratio is very low at 0.24 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, BOOM has a quick ratio of 1.92, which demonstrates the ability of the company to cover short-term liquidity needs.
- Despite the weak revenue results, BOOM has outperformed against the industry average of 19.9%. Since the same quarter one year prior, revenues slightly dropped by 7.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- DYNAMIC MATERIALS CORP 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. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, DYNAMIC MATERIALS CORP reported lower earnings of $0.87 versus $0.94 in the prior year. This year, the market expects earnings to be in line with last year ($0.87 versus $0.87).
- The gross profit margin for DYNAMIC MATERIALS CORP is currently lower than what is desirable, coming in at 30.60%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.46% trails that of the industry average.
- Net operating cash flow has declined marginally to $6.29 million or 6.57% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
-- Written by a member of TheStreet Ratings Staff
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