NEW YORK ( TheStreet) -- Cohu (Nasdaq: COHU) 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 and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity. Highlights from the ratings report include:
- COHU 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 2.83, which clearly demonstrates the ability to cover short-term cash needs.
- The revenue fell significantly faster than the industry average of 26.1%. Since the same quarter one year prior, revenues fell by 31.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- 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. In comparison to the other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, COHU INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- The gross profit margin for COHU INC is currently lower than what is desirable, coming in at 32.20%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.10% significantly trails the industry average.
-- Written by a member of TheStreet Ratings Staff