TSC Ratings' Updates: Amazon.com

We've downgraded Cabot Oil & Gas(COG Quote) from buy to hold. Strengths include its robust revenue growth, increase in net income and expanding profit margins. Weakness include a decline in the stock price during the past year and disappointing return on equity.

Cabot's revenue growth of 41.5% since the same quarter one year ago has slightly outpaced the industry average of 34.3%, boosting EPS. Its gross profit margin is currently very high at 73.4%, having increased from the same quarter last year. Net profit margin of 22% significantly outperformed the industry average. The company's debt-to-equity ratio is very low at 0.20 and is currently below that of the industry average, implying very successful management of debt levels. The quick ratio, however, which is currently 0.63, displays a potential problem in covering short-term cash needs.

Return on equity has greatly decreased since the same quarter one year prior, a signal of major weakness within the corporation. On the basis of ROE, Cabot underperforms the oil, gas and consumable fuels industry but outperforms the S&P 500. Shares are off 31.25% on the year, but the decline was not as bad as the broader market plunge during that same time frame. One factor that may have helped cushion the fall somewhat was the improvement in the company's earnings per share for the last quarter as compared with the same quarter a year earlier. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.