NEW YORK ( TheStreet) -- Fabrinet (NYSE: FN) 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 notable return on equity. However, as a counter to these strengths, we find that the company's profit margins have been poor overall. Highlights from the ratings report include:
- FN's revenue growth has slightly outpaced the industry average of 20.7%. Since the same quarter one year prior, revenues rose by 20.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- FN'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. To add to this, FN has a quick ratio of 2.08, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has significantly increased by 1034.69% to $16.68 million when compared to the same quarter last year. In addition, FABRINET has also vastly surpassed the industry average cash flow growth rate of -69.50%.
- The gross profit margin for FABRINET is currently extremely low, coming in at 12.60%. Regardless of FN's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, FN's net profit margin of 8.70% compares favorably to the industry average.