NEW YORK ( TheStreet) -- Consolidated Graphics (NYSE: CGX) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • 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 Commercial Services & Supplies industry. The net income has significantly decreased by 76.8% when compared to the same quarter one year ago, falling from $6.84 million to $1.59 million.
  • The gross profit margin for CONSOLIDATED GRAPHICS INC is rather low; currently it is at 22.90%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.70% trails that of the industry average.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Commercial Services & Supplies industry and the overall market on the basis of return on equity, CONSOLIDATED GRAPHICS INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • CGX's revenue growth has slightly outpaced the industry average of 0.8%. Since the same quarter one year prior, revenues slightly increased by 2.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.

Consolidated Graphics, Inc., together with its subsidiaries, provides general commercial printing and print-related services primarily in the United States and Canada. The company has a P/E ratio of 12.1, equal to the average diversified services industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Consolidated Graphics has a market cap of $411.9 million and is part of the services sector and diversified services industry. Shares are down 21.8% year to date as of the close of trading on Monday.

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