NEW YORK ( TheStreet) -- Ingles Markets (Nasdaq: IMKTA) 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, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including generally poor debt management, poor profit margins and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • IMKTA's revenue growth has slightly outpaced the industry average of 2.9%. Since the same quarter one year prior, revenues slightly increased by 6.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The net income growth from the same quarter one year ago has exceeded that of the Food & Staples Retailing industry average, but is less than that of the S&P 500. The net income increased by 9.0% when compared to the same quarter one year prior, going from $11.67 million to $12.73 million.
  • The gross profit margin for INGLES MARKETS INC is rather low; currently it is at 24.50%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.40% trails that of the industry average.
  • The debt-to-equity ratio is very high at 2.02 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.23, which clearly demonstrates the inability to cover short-term cash needs.

Ingles Markets, Incorporated operates a supermarket chain in the southeast United States. The company has a P/E ratio of 9.7, below the average retail industry P/E ratio of 9.9 and below the S&P 500 P/E ratio of 17.7. Ingles Markets has a market cap of $361 million and is part of the services sector and retail industry. Shares are down 24.3% year to date as of the close of trading on Wednesday.

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

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