NEW YORK ( TheStreet) -- Polypore International (NYSE: PPO) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its expanding profit margins and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and weak operating cash flow.
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- Regardless of the drop in revenue, the company managed to outperform against the industry average of 10.9%. Since the same quarter one year prior, revenues slightly dropped by 5.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- 45.30% is the gross profit margin for POLYPORE INTERNATIONAL INC which we consider to be strong. Regardless of PPO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PPO's net profit margin of 11.00% compares favorably to the industry average.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 52.88%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 31.74% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, PPO is still more expensive than most of the other companies in its industry.
- Net operating cash flow has decreased to $16.58 million or 47.88% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
-- Written by a member of TheStreet Ratings Staff