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) -- Mastech Holdings (AMEX: MHH) 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, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.
- EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.
- MHH's revenue growth has slightly outpaced the industry average of 2.5%. Since the same quarter one year prior, revenues rose by 10.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The current debt-to-equity ratio, 0.35, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, MHH has a quick ratio of 1.54, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has significantly increased by 87.30% to -$0.06 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 37.49%.
- The gross profit margin for MASTECH HOLDINGS INC is rather low; currently it is at 18.10%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 2.12% trails that of the industry average.
-- Written by a member of TheStreet Ratings Staff