Cybex International Inc. Stock Downgraded (CYBI)

NEW YORK ( TheStreet) -- Cybex International (Nasdaq: CYBI) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally weak debt management.

Highlights from the ratings report include:
  • Net operating cash flow has significantly decreased to -$18.69 million or 3424.73% 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 debt-to-equity ratio of 1.20 is relatively high when compared with the industry average, suggesting a need for better debt level management. Even though the debt-to-equity ratio is weak, CYBI's quick ratio is somewhat strong at 1.14, demonstrating the ability to handle short-term liquidity needs.
  • CYBEX INTERNATIONAL INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, CYBEX INTERNATIONAL INC turned its bottom line around by earning $2.00 versus -$3.40 in the prior year. For the next year, the market is expecting a contraction of 79.0% in earnings ($0.42 versus $2.00).
  • 35.90% is the gross profit margin for CYBEX INTERNATIONAL INC which we consider to be strong. Regardless of CYBI'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 1.30% trails the industry average.
  • This stock has increased by 156.92% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in CYBI do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.

Cybex International, Inc. engages in the development, manufacture, and marketing of strength and cardiovascular fitness equipment products for the commercial and consumer markets in the United States and internationally. The company has a P/E ratio of 0.8, equal to the average consumer durables industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Cybex International has a market cap of $28.8 million and is part of the consumer goods sector and consumer durables industry. Shares are up 316.7% year to date as of the close of trading on Thursday.

You can view the full Cybex International Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
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