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) -- Dell (Nasdaq: DELL) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and disappointing return on equity.
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- Net operating cash flow has significantly increased by 57.81% to $1,343.00 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 34.22%.
- DELL, with its decline in revenue, underperformed when compared the industry average of 18.1%. Since the same quarter one year prior, revenues fell by 10.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The gross profit margin for DELL INC is rather low; currently it is at 23.20%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.46% significantly trails the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Computers & Peripherals industry. The net income has significantly decreased by 46.8% when compared to the same quarter one year ago, falling from $893.00 million to $475.00 million.
-- Written by a member of TheStreet Ratings Staff