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) -- Black Box Corporation (Nasdaq: BBOX) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, attractive valuation levels and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, poor profit margins 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 Communications Equipment industry. The net income increased by 103.0% when compared to the same quarter one year prior, rising from -$283.44 million to $8.52 million.
- BLACK BOX CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, BLACK BOX CORP swung to a loss, reporting -$14.12 versus $2.98 in the prior year. This year, the market expects an improvement in earnings ($2.53 versus -$14.12).
- The gross profit margin for BLACK BOX CORP is currently lower than what is desirable, coming in at 32.90%. Regardless of BBOX's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, BBOX's net profit margin of 3.37% is significantly lower than the industry average.
- Net operating cash flow has decreased to $16.29 million or 46.80% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
-- Written by a member of TheStreet Ratings Staff