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) -- Canon (NYSE: CAJ) 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, expanding profit margins and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
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- CAJ's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, CAJ has a quick ratio of 1.50, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for CANON INC is rather high; currently it is at 52.10%. Regardless of CAJ's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CAJ's net profit margin of 6.41% compares favorably to the industry average.
- CAJ, with its decline in revenue, slightly underperformed the industry average of 38.3%. Since the same quarter one year prior, revenues fell by 38.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Net operating cash flow has decreased to $1,021.64 million or 38.19% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, CANON INC has marginally lower results.
-- Written by a member of TheStreet Ratings Staff