NEW YORK ( TheStreet) -- Rochester Medical Corporation (Nasdaq: ROCM) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and increase in net income. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and a generally disappointing performance in the stock itself. Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 8.6%. Since the same quarter one year prior, revenues rose by 26.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- Although ROCM's debt-to-equity ratio of 0.28 is very low, it is currently higher than that of the industry average. To add to this, ROCM has a quick ratio of 1.79, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for ROCHESTER MEDICAL CORP is rather high; currently it is at 55.00%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -0.50% is in-line with 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. Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, ROCHESTER MEDICAL CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to -$0.59 million or 388.17% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
-- Written by a member of TheStreet RatingsStaff