NEW YORK ( TheStreet) -- Cryolife (NYSE: CRY) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, 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 unimpressive growth in net income, weak operating cash flow and a generally disappointing performance in the stock itself. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 4.4%. Since the same quarter one year prior, revenues slightly increased by 7.0%. 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.
- CRY 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. To add to this, CRY has a quick ratio of 1.91, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for CRYOLIFE INC is currently very high, coming in at 70.20%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, CRY's net profit margin of 3.10% significantly trails the industry average.
- Net operating cash flow has significantly decreased to $1.81 million or 53.31% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Health Care Equipment & Supplies industry. The net income has significantly decreased by 40.5% when compared to the same quarter one year ago, falling from $1.67 million to $0.99 million.
-- Written by a member of TheStreet Ratings Staff