NEW YORK ( TheStreet) -- Synovis Life Technologies (Nasdaq: SYNO) 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, 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 also find weaknesses including a generally disappointing performance in the stock itself and weak operating cash flow. Highlights from the ratings report include:
- SYNO's revenue growth has slightly outpaced the industry average of 6.7%. Since the same quarter one year prior, revenues rose by 12.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- SYNO 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. Along with this, the company maintains a quick ratio of 9.35, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for SYNOVIS LIFE TECH INC is currently very high, coming in at 75.40%. Regardless of SYNO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 9.90% trails the industry average.
- Net operating cash flow has decreased to $2.20 million or 12.00% when compared to the same quarter last year. Despite a decrease in cash flow of 12.00%, SYNOVIS LIFE TECH INC is in line with the industry average cash flow growth rate of -16.90%.
- SYNO has underperformed the S&P 500 Index, declining 11.39% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.