Matrix Service (MTRX) Downgraded From Buy to Hold

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.  TheStreet Ratings quantitative algorithm evaluates over 4,300 stocks on a daily basis by 32 different data factors and assigns a unique buy, sell, or hold recommendation on each stock.  Click here to learn more.

NEW YORK (TheStreet) -- Matrix Service  (MTRX) has been downgraded by TheStreet Ratings from Buy to Hold with a ratings score of C+.  TheStreet Ratings Team has this to say about their recommendation:

"We rate MATRIX SERVICE CO (MTRX) 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 robust revenue growth, 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 unimpressive growth in net income, poor profit margins and weak operating cash flow."

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 15.9%. Since the same quarter one year prior, revenues rose by 42.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • MTRX's debt-to-equity ratio is very low at 0.04 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.01, which illustrates the ability to avoid short-term cash problems.
  • 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. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • Net operating cash flow has significantly decreased to $5.11 million or 72.29% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Energy Equipment & Services industry average. The net income has decreased by 9.7% when compared to the same quarter one year ago, dropping from $6.55 million to $5.91 million.
  • You can view the full analysis from the report here: MTRX Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

More from Markets

Morgan Stanley M&A Prowess to Remain Strong; Google Dealt Another EU Fine--ICYMI

Morgan Stanley M&A Prowess to Remain Strong; Google Dealt Another EU Fine--ICYMI

Trump's Trade War Hurts U.S. Energy Companies, May Help China

Trump's Trade War Hurts U.S. Energy Companies, May Help China

One Chart Will Make You Even More Pumped Up to Buy Tech Stocks

One Chart Will Make You Even More Pumped Up to Buy Tech Stocks

Jim Cramer's Biggest Moments From Delivering Alpha

Jim Cramer's Biggest Moments From Delivering Alpha

'I Don't Think the Market Always Has the Right Idea' Says Bannon

'I Don't Think the Market Always Has the Right Idea' Says Bannon