NEW YORK (

TheStreet

)

-- Netgear

(Nasdaq:

NTGR

) 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, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 9.1%. Since the same quarter one year prior, revenues rose by 48.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • NTGR 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, NTGR has a quick ratio of 2.25, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Communications Equipment industry and the overall market, NETGEAR INC's return on equity is below that of both the industry average and the S&P 500.
  • The gross profit margin for NETGEAR INC is currently lower than what is desirable, coming in at 32.30%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 7.10% trails that of the industry average.

NETGEAR, Inc. designs, develops, and markets networking products for home users and small businesses worldwide. The company has a P/E ratio of 14.5, equal to the average telecommunications industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Netgear has a market cap of $1 billion and is part of the

technology

sector and

telecommunications

industry. Shares are down 23% year to date as of the close of trading on Friday.

You can view the full

Netgear Ratings Report

or get investment ideas from our

investment research center

.

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