NEW YORK ( TheStreet) -- Flexible Solutions International (AMEX: FSI) 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, robust revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and weak operating cash flow. Highlights from the ratings report include:
- Compared to its price level of one year ago, FSI is up 99.24% to its most recent closing price of 2.65. Looking ahead, our view is that this company's fundamentals should 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.
- The revenue growth came in higher than the industry average of 21.6%. Since the same quarter one year prior, revenues rose by 38.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- 44.90% is the gross profit margin for FLEXIBLE SOLUTIONS INTL INC which we consider to be strong. Regardless of FSI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, FSI's net profit margin of 4.50% is significantly lower than the same period one year prior.
- Net operating cash flow has significantly decreased to -$0.47 million or 212.01% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Chemicals industry and the overall market, FLEXIBLE SOLUTIONS INTL INC's return on equity significantly trails that of both the industry average and the S&P 500.