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

)

-- Body Central

(Nasdaq:

BODY

) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

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Highlights from the ratings report include:

  • BODY 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 the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.31, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has increased to $5.04 million or 17.58% when compared to the same quarter last year. Despite an increase in cash flow, BODY CENTRAL CORP's cash flow growth rate is still lower than the industry average growth rate of 40.60%.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. In comparison to the other companies in the Specialty Retail industry and the overall market, BODY CENTRAL CORP'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 BODY CENTRAL CORP is currently lower than what is desirable, coming in at 34.00%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.31% trails that of the industry average.

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Body Central Corp. operates as a specialty retailer of young women's apparel and accessories in the South, Mid-Atlantic, and Midwest regions of the United States. The company has a P/E ratio of 13.7, below the S&P 500 P/E ratio of 17.7. Body Central has a market cap of $164.9 million and is part of the services sector and retail industry. Shares are up 0.5% year to date as of the close of trading on Friday.

You can view the full

Body Central Ratings Report

or get investment ideas from our

investment research center

.

-- 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

.

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