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) -- Famous Dave's of America (Nasdaq: DAVE) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, good cash flow from operations and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.
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- Net operating cash flow has significantly increased by 357.32% to $3.93 million when compared to the same quarter last year. In addition, FAMOUS DAVES OF AMERICA INC has also vastly surpassed the industry average cash flow growth rate of 8.92%.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- 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 Hotels, Restaurants & Leisure industry. The net income has significantly decreased by 92.4% when compared to the same quarter one year ago, falling from $0.82 million to $0.06 million.
- The gross profit margin for FAMOUS DAVES OF AMERICA INC is rather low; currently it is at 18.90%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.16% significantly trails the industry average.
-- Written by a member of TheStreet Ratings Staff