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, expanding profit margins and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and disappointing return on equity.
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Highlights from the ratings report include:
- MOCO's very impressive revenue growth greatly exceeded the industry average of 1.1%. Since the same quarter one year prior, revenues leaped by 57.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The gross profit margin for MOCON INC is rather high; currently it is at 55.20%. Regardless of MOCO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 6.00% trails the industry average.
- MOCON INC has improved earnings per share by 7.1% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, MOCON INC reported lower earnings of $0.35 versus $0.98 in the prior year.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. When compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, MOCON INC's return on equity is below that of both the industry average and the S&P 500.
- MOCO has underperformed the S&P 500 Index, declining 11.88% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
MOCON, Inc., together with its subsidiaries, develops, manufacturers, and markets measurement, analytical, and monitoring products to barrier packaging, food, pharmaceutical, consumer products, industrial hygiene, air quality monitoring, oil and gas exploration, and other industries worldwide. The company has a P/E ratio of 37.5, above the S&P 500 P/E ratio of 17.7. Mocon has a market cap of $74.7 million and is part of the technology sector and electronics industry. Shares are down 6.2% year to date as of the close of trading on Wednesday.
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-- Written by a member of TheStreet Ratings Staff
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