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) -- Harvard Bioscience (Nasdaq: HBIO) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, solid stock price performance and expanding profit margins. 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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- HBIO's debt-to-equity ratio is very low at 0.14 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.89, which clearly demonstrates the ability to cover short-term cash needs.
- Compared to its closing price of one year ago, HBIO's share price has jumped by 41.89%, 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.
- 48.40% is the gross profit margin for HARVARD BIOSCIENCE INC which we consider to be strong. Regardless of HBIO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HBIO's net profit margin of 0.36% is significantly lower than 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 Life Sciences Tools & Services industry. The net income has significantly decreased by 81.8% when compared to the same quarter one year ago, falling from $0.53 million to $0.10 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 Life Sciences Tools & Services industry and the overall market, HARVARD BIOSCIENCE INC's return on equity significantly trails that of both the industry average and the S&P 500.
-- Written by a member of TheStreet Ratings Staff