NEW YORK ( TheStreet) -- Brightpoint (Nasdaq: CELL) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and a generally disappointing performance in the stock itself. Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 9.9%. Since the same quarter one year prior, revenues rose by 22.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- BRIGHTPOINT 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. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, BRIGHTPOINT INC increased its bottom line by earning $0.70 versus $0.55 in the prior year. This year, the market expects an improvement in earnings ($1.07 versus $0.70).
- The gross profit margin for BRIGHTPOINT INC is currently extremely low, coming in at 6.70%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.20% trails that of the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Electronic Equipment, Instruments & Components industry. The net income has significantly decreased by 71.6% when compared to the same quarter one year ago, falling from $9.30 million to $2.64 million.
-- Written by a member of TheStreet Ratings Staff