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) -- Symmetry Medical (NYSE: SMA) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and poor profit margins.
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- Compared to its closing price of one year ago, SMA's share price has jumped by 36.08%, exceeding the performance of the broader market during that same time frame. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
- SYMMETRY MEDICAL INC 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, SYMMETRY MEDICAL INC increased its bottom line by earning $0.25 versus $0.08 in the prior year. This year, the market expects an improvement in earnings ($0.63 versus $0.25).
- Despite the weak revenue results, SMA has outperformed against the industry average of 22.5%. Since the same quarter one year prior, revenues slightly dropped by 1.8%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The gross profit margin for SYMMETRY MEDICAL INC is currently lower than what is desirable, coming in at 25.40%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -0.29% is significantly below that of 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 135.4% when compared to the same quarter one year ago, falling from $0.83 million to -$0.29 million.
-- Written by a member of TheStreet Ratings Staff