NEW YORK ( TheStreet) -- Camtek (Nasdaq: CAMT) has been downgraded by TheStreet Ratings from buy 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 impressive record of earnings per share growth. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 11.9%. Since the same quarter one year prior, revenues rose by 38.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- CAMT's debt-to-equity ratio is very low at 0.08 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.26, which illustrates the ability to avoid short-term cash problems.
- 45.30% is the gross profit margin for CAMTEK LTD which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, CAMT's net profit margin of 7.70% significantly trails 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. In comparison to the other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, CAMTEK LTD's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- CAMT's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 26.44%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.