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) -- Integra LifeSciences Holdings (Nasdaq: IART) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and generally higher debt management risk.
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- The revenue growth came in higher than the industry average of 22.8%. Since the same quarter one year prior, revenues slightly increased by 0.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- INTEGRA LIFESCIENCES HLDGS has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, INTEGRA LIFESCIENCES HLDGS increased its bottom line by earning $1.45 versus $0.95 in the prior year. This year, the market expects an improvement in earnings ($2.71 versus $1.45).
- The gross profit margin for INTEGRA LIFESCIENCES HLDGS is rather high; currently it is at 59.70%. Regardless of IART's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, IART's net profit margin of -2.05% significantly underperformed when compared to 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 Health Care Equipment & Supplies industry. The net income has significantly decreased by 160.5% when compared to the same quarter one year ago, falling from $6.69 million to -$4.05 million.
- The debt-to-equity ratio of 1.02 is relatively high when compared with the industry average, suggesting a need for better debt level management.
-- Written by a member of TheStreet Ratings Staff