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 largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.
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Highlights from the ratings report include:
- BRKS 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. To add to this, BRKS has a quick ratio of 2.39, which demonstrates the ability of the company to cover short-term liquidity needs.
- 36.90% is the gross profit margin for BROOKS AUTOMATION INC which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, BRKS's net profit margin of 5.70% significantly trails the industry average.
- Net operating cash flow has significantly decreased to $10.88 million or 61.56% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- 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 Semiconductors & Semiconductor Equipment industry and the overall market, BROOKS AUTOMATION INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
Brooks Automation, Inc. provides automation, vacuum, and instrumentation solutions for semiconductor manufacturing, life sciences, and clean energy markets worldwide. The company has a P/E ratio of 17.2, above the average electronics industry P/E ratio of 16.5 and below the S&P 500 P/E ratio of 17.7. Brooks Automation has a market cap of $535.1 million and is part of the
industry. Shares are down 21.3% year to date as of the close of trading on Thursday.
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-- Written by a member of TheStreet Ratings Staff
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