NEW YORK ( TheStreet) -- Strategic Diagnostics (Nasdaq: SDIX) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, disappointing return on equity and a generally disappointing performance in the stock itself. Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Life Sciences Tools & Services industry. The net income increased by 758.1% when compared to the same quarter one year prior, rising from -$0.26 million to $1.71 million.
- SDIX'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 5.61, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for STRATEGIC DIAGNOSTICS INC is rather high; currently it is at 50.70%. Regardless of SDIX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SDIX's net profit margin of 30.80% significantly outperformed against the industry.
- STRATEGIC DIAGNOSTICS INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, STRATEGIC DIAGNOSTICS INC reported poor results of -$0.22 versus -$0.04 in the prior year.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Life Sciences Tools & Services industry and the overall market, STRATEGIC DIAGNOSTICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
-- Written by a member of TheStreet RatingsStaff