NEW YORK ( TheStreet) -- SurModics Incorporated (Nasdaq: SRDX) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including poor profit margins and weak operating cash flow. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 6.7%. Since the same quarter one year prior, revenues rose by 10.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- SRDX has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.18, which clearly demonstrates the ability to cover short-term cash needs.
- Net operating cash flow has declined marginally to $4.94 million or 6.79% when compared to the same quarter last year. Despite a decrease in cash flow SURMODICS INC is still fairing well by exceeding its industry average cash flow growth rate of -48.12%.
- The gross profit margin for SURMODICS INC is rather low; currently it is at 19.00%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, SRDX's net profit margin of -75.40% significantly underperformed when compared to the industry average.