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) -- Kyocera Corporation (NYSE: KYO) 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, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and poor profit margins.
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- KYO's revenue growth has slightly outpaced the industry average of 4.5%. Since the same quarter one year prior, revenues slightly increased by 6.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- KYO's debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, KYO has a quick ratio of 2.46, which demonstrates the ability of the company to cover short-term liquidity needs.
- KYOCERA CORP has improved earnings per share by 16.2% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, KYOCERA CORP reported lower earnings of $1.93 versus $2.62 in the prior year. This year, the market expects an improvement in earnings ($2.23 versus $1.93).
- The gross profit margin for KYOCERA CORP is currently lower than what is desirable, coming in at 32.10%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 7.26% is above that of the industry average.
- Net operating cash flow has decreased to $160.41 million or 37.82% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.