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) -- National Instruments (Nasdaq: NATI) 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, disappointing return on equity and premium valuation.
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- NATI 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 2.54, which clearly demonstrates the ability to cover short-term cash needs.
- Net operating cash flow has significantly increased by 125.28% to $46.14 million when compared to the same quarter last year. In addition, NATIONAL INSTRUMENTS CORP has also vastly surpassed the industry average cash flow growth rate of 62.22%.
- The gross profit margin for NATIONAL INSTRUMENTS CORP is currently very high, coming in at 80.94%. Regardless of NATI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NATI's net profit margin of 6.57% 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 Electronic Equipment, Instruments & Components industry and the overall market, NATIONAL INSTRUMENTS CORP's return on equity is below that of both the industry average and the S&P 500.