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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link

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NEW YORK (

TheStreet

)

-- Gaming Partners International Corporation

(Nasdaq:

GPIC

) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its 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 deteriorating net income, disappointing return on equity and weak operating cash flow.

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Highlights from the ratings report include:

  • GPIC's revenue growth has slightly outpaced the industry average of 3.4%. Since the same quarter one year prior, revenues slightly increased by 8.6%. 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.
  • GPIC 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 3.47, which clearly demonstrates the ability to cover short-term cash needs.
  • 35.35% is the gross profit margin for GAMING PARTNERS INTL CORP which we consider to be strong. Regardless of GPIC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GPIC's net profit margin of -0.38% significantly underperformed when compared to 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. In comparison to the other companies in the Hotels, Restaurants & Leisure industry and the overall market, GAMING PARTNERS INTL CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • Net operating cash flow has significantly decreased to -$3.44 million or 193.54% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

Gaming Partners International Corporation, together with its subsidiaries, engages in the manufacture and supply of casino table game equipment to licensed casinos worldwide. Gaming Partners International has a market cap of $65.4 million and is part of the consumer goods sector and consumer durables industry. Shares are up 20.4% year to date as of the close of trading on Friday.

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Gaming Partners International Ratings Report

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.