Ultratech Inc. Stock Downgraded (UTEK)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

NEW YORK ( TheStreet) -- Ultratech (Nasdaq: UTEK) 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, reasonable valuation levels 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.

  • 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.

Highlights from the ratings report include:
  • UTEK'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. Along with this, the company maintains a quick ratio of 9.29, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for ULTRATECH INC is rather high; currently it is at 51.32%. Regardless of UTEK's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, UTEK's net profit margin of 1.99% is significantly lower than the industry average.
  • Net operating cash flow has significantly decreased to -$0.82 million or 105.15% 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. When compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, ULTRATECH INC's return on equity is below that of both the industry average and the S&P 500.

Ultratech, Inc. develops, manufactures, and markets photolithography, laser thermal processing, and inspection equipment. It supplies step-and-repeat photolithography systems based on one-to-one imaging technology for semiconductor device and nanotechnology manufacturers. Ultratech has a market cap of $785.5 million and is part of the technology sector and electronics industry. Shares are down 24.2% year to date as of the close of trading on Tuesday.

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

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more..
Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.