NEW YORK ( TheStreet) -- Tianyin Pharmaceutical (AMEX: TPI) 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 notable return on equity. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:
  • TPI's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 39.02%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • 45.90% is the gross profit margin for TIANYIN PHARMACEUTICAL CO which we consider to be strong. Regardless of TPI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TPI's net profit margin of 17.40% compares favorably to the industry average.
  • TIANYIN PHARMACEUTICAL CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. Stable Earnings per share over the past year indicate the company has sound management over its earnings and share float. During the past fiscal year, TIANYIN PHARMACEUTICAL CO increased its bottom line by earning $0.39 versus $0.38 in the prior year.
  • TPI's debt-to-equity ratio is very low at 0.02 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 3.78, which clearly demonstrates the ability to cover short-term cash needs.
  • TPI's very impressive revenue growth greatly exceeded the industry average of 4.4%. Since the same quarter one year prior, revenues leaped by 69.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.

Tianyin Pharmaceutical Co., Inc. engages in the development, manufacture, marketing, and sale of biopharmaceuticals, branded generics, modernized traditional Chinese medicines, and other pharmaceuticals in the People's Republic of China. Tianyin has a market cap of $67 million and is part of the health care sector and drugs industry.

You can view the full Tianyin Ratings Report or get investment ideas from our investment research center.
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