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Perion Network Ltd. Stock Downgraded (PERI)

NEW YORK ( TheStreet) -- Perion Network (Nasdaq: PERI) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:

  • PERI's revenue growth has slightly outpaced the industry average of 23.0%. Since the same quarter one year prior, revenues rose by 32.1%. 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.
  • PERI 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. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.96 is somewhat weak and could be cause for future problems.
  • PERION NETWORK LTD has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, PERION NETWORK LTD reported lower earnings of $0.56 versus $0.85 in the prior year.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet Software & Services industry. The net income has significantly decreased by 89.4% when compared to the same quarter one year ago, falling from $1.82 million to $0.19 million.
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Perion Network Ltd., a digital media company, provides products and services to consumers to help consumers with digital communication, photo enjoyment and sharing, and online safety and security. The company has a P/E ratio of 7.3, equal to the average computer software & services industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Perion Network has a market cap of $41.4 million and is part of the technology sector and computer software & services industry. Shares are up 8.4% year to date as of the close of trading on Tuesday.

You can view the full Perion Network Ratings Report or get investment ideas from our investment research center.
-- Written by a member of TheStreet Ratings Staff

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