Astro-Med Inc. Stock Downgraded (ALOT)

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) -- Astro-Med (Nasdaq: ALOT) 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 solid stock price performance. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, unimpressive growth in net income and disappointing return on equity.

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Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 10.4%. Since the same quarter one year prior, revenues slightly increased by 8.0%. 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.
  • 37.30% is the gross profit margin for ASTRO-MED INC which we consider to be strong. Regardless of ALOT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ALOT's net profit margin of -2.89% 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 Computers & Peripherals industry. The net income has significantly decreased by 153.6% when compared to the same quarter one year ago, falling from $0.84 million to -$0.45 million.
  • 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 Computers & Peripherals industry and the overall market, ASTRO-MED INC's return on equity significantly trails that of both the industry average and the S&P 500.
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Astro-Med, Inc. designs, develops, manufactures, distributes, and services various specialty printers, and data acquisition and analysis systems primarily in the United States. It operates in two segments, Test & Measurement (T&M) and QuickLabel Systems (QuickLabel). The company has a P/E ratio of 39.6, above the S&P 500 P/E ratio of 17.7. Astro-Med has a market cap of $79 million and is part of the technology sector and computer hardware industry. Shares are up 5.8% year to date as of the close of trading on Wednesday.

You can view the full Astro-Med Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

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