NEW YORK ( TheStreet) -- Elecsys Corporation (Nasdaq: ESYS) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income 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:
- ELECSYS CORP reported significant earnings per share improvement 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 two years. During the past fiscal year, ELECSYS CORP turned its bottom line around by earning $0.22 versus -$0.19 in the prior year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electronic Equipment, Instruments & Components industry. The net income increased by 99.1% when compared to the same quarter one year prior, rising from $0.11 million to $0.21 million.
- The current debt-to-equity ratio, 0.41, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.90 is somewhat weak and could be cause for future problems.
- 35.30% is the gross profit margin for ELECSYS CORP which we consider to be strong. Regardless of ESYS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ESYS's net profit margin of 3.80% compares favorably to the industry average.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, ELECSYS CORP's return on equity is below that of both the industry average and the S&P 500.