NEW YORK ( TheStreet) -- RTI Biologics (Nasdaq: RTIX) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its expanding profit margins, notable return on equity and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and feeble growth in the company's earnings per share. Highlights from the ratings report include:
- The gross profit margin for RTI BIOLOGICS INC is rather high; currently it is at 50.90%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, RTIX's net profit margin of 5.50% significantly trails the industry average.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 6.5%. Since the same quarter one year prior, revenues slightly dropped by 5.4%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. In comparison to the other companies in the Health Care Equipment & Supplies industry and the overall market, RTI BIOLOGICS INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- 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 14.3% when compared to the same quarter one year ago, dropping from $2.77 million to $2.37 million.
- Net operating cash flow has significantly decreased to $5.35 million or 79.75% 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.