NEW YORK ( TheStreet) -- RTI Biologics (Nasdaq: RTIX) 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 and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.
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- RTIX's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, RTIX has a quick ratio of 2.12, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for RTI BIOLOGICS INC is rather high; currently it is at 52.51%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, RTIX's net profit margin of 3.61% significantly trails the industry average.
- RTI BIOLOGICS INC's earnings per share declined by 25.0% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. However, the consensus estimates suggest that there will be an upward trend in the coming year. During the past fiscal year, RTI BIOLOGICS INC's EPS of $0.15 remained unchanged from the prior years' EPS of $0.15. This year, the market expects an improvement in earnings ($0.18 versus $0.15).
- Net operating cash flow has significantly decreased to -$8.06 million or 284.71% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- 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. In comparison to the other companies in the Health Care Equipment & Supplies industry and the overall market, RTI BIOLOGICS INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.