Editor's Note: 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. NEW YORK ( TheStreet) -- Carbo Ceramics (NYSE: CRR) 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, good cash flow from operations, expanding profit margins, reasonable valuation levels and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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- CRR 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. Along with this, the company maintains a quick ratio of 3.11, which clearly demonstrates the ability to cover short-term cash needs.
- Net operating cash flow has increased to $36.69 million or 46.52% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 16.16%.
- 40.80% is the gross profit margin for CARBO CERAMICS INC which we consider to be strong. Regardless of CRR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CRR's net profit margin of 15.81% compares favorably to the industry average.
- CRR, with its decline in revenue, underperformed when compared the industry average of 11.3%. Since the same quarter one year prior, revenues slightly dropped by 9.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
-- Written by a member of TheStreet Ratings Staff