NEW YORK ( TheStreet) -- Invacare Corporation (NYSE: IVC) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 6.7%. Since the same quarter one year prior, revenues slightly increased by 4.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Despite currently having a low debt-to-equity ratio of 0.43, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.02 is sturdy.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Health Care Equipment & Supplies industry. The net income has decreased by 17.9% when compared to the same quarter one year ago, dropping from $15.60 million to $12.80 million.
  • 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. In comparison to the other companies in the Health Care Equipment & Supplies industry and the overall market, INVACARE CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.

Invacare Corporation designs, manufactures, and distributes medical equipment and supplies for the non-acute care environment, including the home health care, retail, and extended care markets. The company has a P/E ratio of 13.2, equal to the average health services industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Invacare has a market cap of $476.9 million and is part of the health care sector and health services industry. Shares are down 46.9% year to date as of the close of trading on Wednesday.

You can view the full Invacare Ratings Report or get investment ideas from our investment research center.
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