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NEW YORK ( TheStreet) -- Northwest Pipe Company (Nasdaq: NWPX) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance 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 poor profit margins.

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Highlights from the ratings report include:
  • Compared to its closing price of one year ago, NWPX's share price has jumped by 29.30%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • Despite currently having a low debt-to-equity ratio of 0.39, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that NWPX's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.52 is high and demonstrates strong liquidity.
  • NWPX, with its decline in revenue, underperformed when compared the industry average of 2.8%. Since the same quarter one year prior, revenues fell by 15.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Construction & Engineering industry and the overall market, NORTHWEST PIPE CO's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for NORTHWEST PIPE CO is currently extremely low, coming in at 5.88%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -14.76% is significantly below that of the industry average.

Northwest Pipe Company manufactures and markets welded steel pipe and other products in the United States, Canada, and Mexico. Northwest Pipe has a market cap of $331.9 million and is part of the basic materials sector and metals & mining industry. Shares are down 7.6% year to date as of the close of trading on Friday.

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

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