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"We rate PRO-DEX INC/CO (PDEX) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. 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 solid stock price performance. However, as a counter to these strengths, we find that the company's profit margins have been poor overall."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 7.6%. Since the same quarter one year prior, revenues rose by 18.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- PDEX's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.85, which clearly demonstrates the ability to cover short-term cash needs.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, PRO-DEX INC/CO's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for PRO-DEX INC/CO is currently lower than what is desirable, coming in at 32.99%. Regardless of PDEX's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, PDEX's net profit margin of 0.74% is significantly lower than the industry average.
- You can view the full analysis from the report here: PDEX Ratings Report