NEW YORK ( TheStreet) -- Brooks Automation (Nasdaq: BRKS) 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 sub par growth in net income.

Highlights from the ratings report include:
  • BRKS 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, BRKS has a quick ratio of 2.50, which demonstrates the ability of the company to cover short-term liquidity needs.
  • 38.80% is the gross profit margin for BROOKS AUTOMATION INC which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, BRKS's net profit margin of 6.80% significantly trails the industry average.
  • The revenue fell significantly faster than the industry average of 11.7%. Since the same quarter one year prior, revenues fell by 27.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • BROOKS AUTOMATION 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. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, BROOKS AUTOMATION INC increased its bottom line by earning $1.98 versus $0.93 in the prior year. For the next year, the market is expecting a contraction of 67.7% in earnings ($0.64 versus $1.98).

Brooks Automation, Inc. provides automation, vacuum, and instrumentation solutions for semiconductor manufacturing, life sciences, and clean energy markets worldwide. The company has a P/E ratio of 6.6, equal to the average electronics industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Brooks Automation has a market cap of $607.4 million and is part of the technology sector and electronics industry. Shares are down 10.8% year to date as of the close of trading on Thursday.

You can view the full Brooks Automation 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.