NEW YORK ( TheStreet) -- CTS Corporation (NYSE: CTS) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, revenue growth and largely solid financial position with reasonable debt levels by most measures. 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 gross profit margin for CTS CORP is rather low; currently it is at 20.10%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.30% trails that of the industry average.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, CTS CORP's return on equity is below that of both the industry average and the S&P 500.
- CTS's debt-to-equity ratio is very low at 0.26 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.41, which illustrates the ability to avoid short-term cash problems.
- The revenue growth significantly trails the industry average of 47.0%. Since the same quarter one year prior, revenues slightly increased by 8.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.