NEW YORK ( TheStreet) -- Universal Technical Institute (NYSE: UTI) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself. Highlights from the ratings report include:
- UTI 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 the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.17, which illustrates the ability to avoid short-term cash problems.
- The gross profit margin for UNIVERSAL TECHNICAL INST is rather high; currently it is at 56.00%. Regardless of UTI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 3.80% trails the industry average.
- UTI, with its decline in revenue, underperformed when compared the industry average of 4.5%. Since the same quarter one year prior, revenues slightly dropped by 9.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Net operating cash flow has significantly decreased to $5.57 million or 52.56% when compared to the same quarter last year. Despite a decrease in cash flow of 52.56%, UNIVERSAL TECHNICAL INST is in line with the industry average cash flow growth rate of -56.48%.
-- Written by a member of TheStreet RatingsStaff