NEW YORK ( TheStreet) -- Coffee Holding Company (Nasdaq: JVA) has been downgraded by TheStreet Ratings from buy to hold. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.
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- Although JVA's debt-to-equity ratio of 0.01 is very low, it is currently higher than that of the industry average. To add to this, JVA has a quick ratio of 1.81, which demonstrates the ability of the company to cover short-term liquidity needs.
- Despite the weak revenue results, JVA has outperformed against the industry average of 24.3%. Since the same quarter one year prior, revenues slightly dropped by 0.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- COFFEE HOLDING CO 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. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, COFFEE HOLDING CO INC reported lower earnings of $0.15 versus $0.44 in the prior year. This year, the market expects an improvement in earnings ($0.41 versus $0.15).
- The gross profit margin for COFFEE HOLDING CO INC is currently extremely low, coming in at 4.00%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -1.00% is significantly below that of the industry average.
- Net operating cash flow has significantly decreased to -$1.15 million or 231.88% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
-- Written by a member of TheStreet Ratings Staff