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) -- Zygo Corporation (Nasdaq: ZIGO) 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, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.
- ZIGO has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.33, which clearly demonstrates the ability to cover short-term cash needs.
- Net operating cash flow has significantly increased by 334.93% to $4.53 million when compared to the same quarter last year. In addition, ZYGO CORP has also vastly surpassed the industry average cash flow growth rate of -0.22%.
- 47.71% is the gross profit margin for ZYGO CORP which we consider to be strong. Regardless of ZIGO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 6.29% trails the industry average.
- ZYGO CORP 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. During the past fiscal year, ZYGO CORP reported lower earnings of $0.41 versus $2.29 in the prior year.
- 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 Electronic Equipment, Instruments & Components industry. The net income has significantly decreased by 89.9% when compared to the same quarter one year ago, falling from $24.96 million to $2.52 million.