NEW YORK ( TheStreet) -- Silvercorp Metals (NYSE: SVM) 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 impressive record of earnings per share growth. However, as a counter to these strengths, we find that the growth in the company's net income has been quite unimpressive.

Highlights from the ratings report include:
  • 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. Compared to other companies in the Metals & Mining industry and the overall market, SILVERCORP METALS INC's return on equity exceeds that of both the industry average and the S&P 500.
  • The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Metals & Mining industry average. The net income increased by 28.7% when compared to the same quarter one year prior, rising from $9.76 million to $12.56 million.
  • Net operating cash flow has increased to $34.32 million or 44.44% when compared to the same quarter last year. Despite an increase in cash flow of 44.44%, SILVERCORP METALS INC is still growing at a significantly lower rate than the industry average of 187.91%.
  • SVM 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.
  • SVM's very impressive revenue growth is slightly higher than the industry average of 48.6%. Since the same quarter one year prior, revenues leaped by 50.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.

Silvercorp Metals Inc. engages in the acquisition, exploration, development, and operation of silver mineral properties in China and Canada. The company has a P/E ratio of 27.2, equal to the average metals & mining industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Silvercorp has a market cap of $2 billion and is part of the basic materials sector and metals & mining industry. Shares are down 14.7% year to date as of the close of trading on Thursday.

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

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