NEW YORK ( TheStreet) -- GenMark Diagnostics (Nasdaq: GNMK) 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 solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and weak operating cash flow. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 9.4%. Since the same quarter one year prior, revenues rose by 35.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- GNMK's debt-to-equity ratio is very low at 0.05 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 7.71, which clearly demonstrates the ability to cover short-term cash needs.
- Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, GENMARK DIAGNOSTICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has decreased to -$4.90 million or 18.80% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Health Care Equipment & Supplies industry. The net income has decreased by 8.6% when compared to the same quarter one year ago, dropping from -$5.14 million to -$5.58 million.