NEW YORK ( TheStreet) -- Harvard Bioscience (Nasdaq: HBIO) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow. Highlights from the ratings report include:
- HBIO's debt-to-equity ratio is very low at 0.17 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.92, which clearly demonstrates the ability to cover short-term cash needs.
- 46.30% is the gross profit margin for HARVARD BIOSCIENCE INC which we consider to be strong. Regardless of HBIO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HBIO's net profit margin of 0.10% is significantly lower than the same period one year prior.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. In comparison to the other companies in the Life Sciences Tools & Services industry and the overall market, HARVARD BIOSCIENCE INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- Net operating cash flow has decreased to $1.21 million or 34.66% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.