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 revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. 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 weak operating cash flow.
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Highlights from the ratings report include:
- LMNX's revenue growth has slightly outpaced the industry average of 10.5%. Since the same quarter one year prior, revenues rose by 12.6%. 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.
- LMNX's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 6.71, which clearly demonstrates the ability to cover short-term cash needs.
- LUMINEX CORP's earnings per share declined by 27.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, LUMINEX CORP increased its bottom line by earning $0.35 versus $0.12 in the prior year. This year, the market expects an improvement in earnings ($0.42 versus $0.35).
- Net operating cash flow has significantly decreased to -$0.03 million or 100.32% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The share price of LUMINEX CORP has not done very well: it is down 19.14% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
Luminex Corporation engages in the development, manufacture, and sale of proprietary biological testing technologies and products for the life sciences and diagnostic industries. The company has a P/E ratio of 56.3, above the average health services industry P/E ratio of 54.5 and above the S&P 500 P/E ratio of 17.7. Luminex has a market cap of $727.5 million and is part of the
industry. Shares are down 20.2% year to date as of the close of trading on Monday.
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-- Written by a member of TheStreet Ratings Staff
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.