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) -- Geospace Technologies (Nasdaq: GEOS) 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, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, disappointing return on equity and a generally disappointing performance in the stock itself.
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- GEOS 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. To add to this, GEOS has a quick ratio of 2.42, which demonstrates the ability of the company to cover short-term liquidity needs.
- 48.27% is the gross profit margin for GEOSPACE TECHNOLOGIES CORP which we consider to be strong. Regardless of GEOS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GEOS's net profit margin of 15.77% 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. Compared to other companies in the Energy Equipment & Services industry and the overall market on the basis of return on equity, GEOSPACE TECHNOLOGIES CORP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Energy Equipment & Services industry. The net income has significantly decreased by 35.9% when compared to the same quarter one year ago, falling from $16.87 million to $10.82 million.