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NEW YORK (TheStreet) -- Lightpath Technologies (LPTH - Get Report) has been upgraded by TheStreet Ratings from Sell to Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate LIGHTPATH TECHNOLOGIES INC (LPTH) 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 increase in net income, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electronic Equipment, Instruments & Components industry. The net income increased by 142.2% when compared to the same quarter one year prior, rising from -$0.24 million to $0.10 million.
- LPTH's debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, LPTH has a quick ratio of 1.56, which demonstrates the ability of the company to cover short-term liquidity needs.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
- Net operating cash flow has significantly decreased to $0.04 million or 93.72% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- 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 Electronic Equipment, Instruments & Components industry and the overall market, LIGHTPATH TECHNOLOGIES INC's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: LPTH Ratings Report