NEW YORK ( TheStreet) -- Kyocera Corporation (NYSE: KYO) 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, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and a generally disappointing performance in the stock itself. Highlights from the ratings report include:
- KYO's debt-to-equity ratio is very low at 0.02 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 2.54, which clearly demonstrates the ability to cover short-term cash needs.
- The revenue fell significantly faster than the industry average of 42.4%. Since the same quarter one year prior, revenues fell by 10.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The gross profit margin for KYOCERA CORP is currently lower than what is desirable, coming in at 26.10%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 9.00% is above that of the industry average.
- 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, KYOCERA CORP's return on equity is below that of both the industry average and the S&P 500.