NEW YORK ( TheStreet) -- Conmed Corporation (Nasdaq: CNMD) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and revenue growth. However, as a counter to these strengths, we find that the company's return on equity has been disappointing. Highlights from the ratings report include:
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
- CONMED CORP has improved earnings per share by 20.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, CONMED CORP increased its bottom line by earning $1.05 versus $0.41 in the prior year. This year, the market expects an improvement in earnings ($1.46 versus $1.05).
- Although CNMD's debt-to-equity ratio of 0.28 is very low, it is currently higher than that of the industry average. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.84 is somewhat weak and could be cause for future problems.
- The gross profit margin for CONMED CORP is rather high; currently it is at 53.80%. Regardless of CNMD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CNMD's net profit margin of 4.70% is significantly lower than the same period one year prior.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Health Care Equipment & Supplies industry and the overall market, CONMED CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.