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 (
) 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 reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and poor profit margins.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 5.6%. Since the same quarter one year prior, revenues rose by 22.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- ATRO's debt-to-equity ratio is very low at 0.28 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.15, which illustrates the ability to avoid short-term cash problems.
- The gross profit margin for ASTRONICS CORP is currently lower than what is desirable, coming in at 27.40%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 7.20% trails that of the industry average.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 38.91%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 26.92% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, ATRO is still more expensive than most of the other companies in its industry.
Astronics Corporation, through its subsidiaries, designs and manufactures products for the aerospace and defense industries worldwide. It operates in two segments, Aerospace and Test Systems. The company has a P/E ratio of 12.8, below the S&P 500 P/E ratio of 17.7. Astronics has a market cap of $238.2 million and is part of the industrial goods sector and aerospace/defense industry. Shares are down 41.8% year to date as of the close of trading on Wednesday.
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