NEW YORK ( TheStreet) -- Ladenburg Thalman Financial Services (AMEX: LTS) has been upgraded by TheStreet Ratings from sell 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 compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including poor profit margins and weak operating cash flow. Highlights from the ratings report include:
- The gross profit margin for LADENBURG THALMANN FINL SERV is currently extremely low, coming in at 4.30%. Regardless of LTS's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, LTS's net profit margin of 0.70% is significantly lower than the same period one year prior.
- Net operating cash flow has declined marginally to -$1.18 million or 7.24% when compared to the same quarter last year. Despite a decrease in cash flow of 7.24%, LADENBURG THALMANN FINL SERV is still significantly exceeding the industry average of -115.62%.
- The debt-to-equity ratio is somewhat low, currently at 0.63, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
- The revenue growth greatly exceeded the industry average of 2.7%. Since the same quarter one year prior, revenues rose by 30.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.