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 attractive valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, disappointing return on equity and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- Net operating cash flow has significantly increased by 51.87% to $14.78 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 21.45%.
- Although SYX's debt-to-equity ratio of 0.02 is very low, it is currently higher than that of the industry average. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.87 is somewhat weak and could be cause for future problems.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Specialty Retail industry. The net income has significantly decreased by 47.8% when compared to the same quarter one year ago, falling from $13.57 million to $7.08 million.
- 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. When compared to other companies in the Specialty Retail industry and the overall market, SYSTEMAX INC's return on equity is below that of both the industry average and the S&P 500.
Systemax Inc. operates as a direct marketer of brand name and private label products. The company operates in two segments, Technology Products and Industrial Products. The Technology Products segment sells computers, computer supplies, and consumer electronics in North America and Europe. The company has a P/E ratio of 9.6, equal to the average computer software & services industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Systemax has a market cap of $455.2 million and is part of the
industry. Shares are down 24.6% year to date as of the close of trading on Wednesday.
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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.