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NEW YORK ( TheStreet) -- Brooks Automation (Nasdaq: BRKS) 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 increase in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and disappointing return on equity.

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Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 4.1%. Since the same quarter one year prior, revenues rose by 15.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • BRKS's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, BRKS has a quick ratio of 1.94, which demonstrates the ability of the company to cover short-term liquidity needs.
  • BROOKS AUTOMATION INC reported significant earnings per share improvement 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, BROOKS AUTOMATION INC swung to a loss, reporting -$0.10 versus $2.07 in the prior year. This year, the market expects an improvement in earnings ($0.28 versus -$0.10).
  • BRKS has underperformed the S&P 500 Index, declining 8.93% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, BROOKS AUTOMATION INC's return on equity significantly trails that of both the industry average and the S&P 500.

Brooks Automation, Inc. provides automation, vacuum, and instrumentation solutions for semiconductor manufacturing, life sciences, and technology device manufacturing markets. Brooks Automation has a market cap of $627.3 million and is part of the technology sector and electronics industry. Shares are down 10.5% year to date as of the close of trading on Wednesday.

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

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