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) -- Theragenics Corporation (NYSE: TGX) has been downgraded by TheStreet Ratings from buy to hold. 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 and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.
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- Although TGX's debt-to-equity ratio of 0.29 is very low, it is currently higher than that of the industry average. Along with this, the company maintains a quick ratio of 7.92, which clearly demonstrates the ability to cover short-term cash needs.
- Net operating cash flow has significantly increased by 525.46% to $3.93 million when compared to the same quarter last year. In addition, THERAGENICS CORP has also vastly surpassed the industry average cash flow growth rate of -41.21%.
- 39.90% is the gross profit margin for THERAGENICS CORP which we consider to be strong. Regardless of TGX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TGX's net profit margin of -1.69% significantly underperformed when compared to the industry average.
- In its most recent trading session, TGX has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, THERAGENICS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
-- Written by a member of TheStreet Ratings Staff