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) -- Altera (Nasdaq: ALTR) 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 feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.
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- Although ALTR's debt-to-equity ratio of 0.14 is very low, it is currently higher than that of the industry average. Along with this, the company maintains a quick ratio of 5.40, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for ALTERA CORP is currently very high, coming in at 70.66%. Regardless of ALTR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ALTR's net profit margin of 26.78% compares favorably to the industry average.
- 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, ALTERA CORP's return on equity is below that of both the industry average and the S&P 500.
- Net operating cash flow has decreased to $245.41 million or 13.95% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, ALTERA CORP has marginally lower results.