NEW YORK ( TheStreet) -- Ingram Micro (NYSE: IM) 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 deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • The revenue growth significantly trails the industry average of 45.5%. Since the same quarter one year prior, revenues slightly increased by 5.3%. 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.
  • IM's debt-to-equity ratio is very low at 0.13 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.95 is somewhat weak and could be cause for future problems.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Electronic Equipment, Instruments & Components industry. The net income has significantly decreased by 64.1% when compared to the same quarter one year ago, falling from $64.99 million to $23.33 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. When compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, INGRAM MICRO INC's return on equity is below that of both the industry average and the S&P 500.

Ingram Micro Inc. distributes information technology (IT) products and supply chain solutions worldwide. The company has a P/E ratio of 10.8, equal to the average wholesale industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Ingram Micro has a market cap of $2.6 billion and is part of the services sector and wholesale industry. Shares are down 11.1% year to date as of the close of trading on Friday.

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