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) -- Dynatronics Corporation (Nasdaq: DYNT) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its increase in net income and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and a generally disappointing performance in the stock itself.
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- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Equipment & Supplies industry. The net income increased by 206.5% when compared to the same quarter one year prior, rising from $0.05 million to $0.14 million.
- 40.40% is the gross profit margin for DYNATRONICS CORP 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, DYNT's net profit margin of 1.76% significantly trails the industry average.
- DYNATRONICS CORP has shown improvement in its earnings for its most recently reported quarter when compared with the same quarter a year earlier. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, DYNATRONICS CORP swung to a loss, reporting -$0.05 versus $0.15 in the prior year.
- Net operating cash flow has decreased to $0.20 million or 45.17% 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.
- 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, DYNATRONICS 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