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NEW YORK (TheStreet) -- Natural Alternatives (NAII) 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 NATURAL ALTERNATIVES (NAII) 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 compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including poor profit margins, weak operating cash flow and a generally disappointing performance in the stock itself."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- NAII's revenue growth has slightly outpaced the industry average of 5.7%. Since the same quarter one year prior, revenues slightly increased by 9.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- NAII 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. Along with this, the company maintains a quick ratio of 3.18, which clearly demonstrates the ability to cover short-term cash needs.
- NATURAL ALTERNATIVES reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. During the past fiscal year, NATURAL ALTERNATIVES increased its bottom line by earning $0.29 versus $0.23 in the prior year.
- The gross profit margin for NATURAL ALTERNATIVES is rather low; currently it is at 18.17%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 2.60% trails that of the industry average.
- Net operating cash flow has significantly decreased to -$2.64 million or 67.68% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full analysis from the report here: NAII Ratings Report