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) -- Spirit AeroSystems Holdings (NYSE: SPR) 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 and largely solid financial position with reasonable debt levels by most measures. 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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- SPR's revenue growth has slightly outpaced the industry average of 8.8%. Since the same quarter one year prior, revenues rose by 13.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.63, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.78 is somewhat weak and could be cause for future problems.
- SPIRIT AEROSYSTEMS HOLDINGS has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, SPIRIT AEROSYSTEMS HOLDINGS reported lower earnings of $0.25 versus $1.34 in the prior year. This year, the market expects an improvement in earnings ($2.01 versus $0.25).
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Aerospace & Defense industry and the overall market, SPIRIT AEROSYSTEMS HOLDINGS's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to $59.70 million or 50.74% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.