TD Ameritrade Holding Corporation Stock Downgraded (AMTD)

NEW YORK (TheStreet) -- TD Ameritrade Holding Corporation (NYSE:AMTD) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, a generally disappointing performance in the stock itself and deteriorating net income.

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Highlights from the ratings report include:

• The current debt-to-equity ratio, 0.31, is low and is below the industry average, implying that there has been successful management of debt levels.
• 39.50% is the gross profit margin for TD AMERITRADE HOLDING CORP which we consider to be strong. Regardless of AMTD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, AMTD's net profit margin of 20.30% compares favorably to the industry average.
• The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Capital Markets industry and the overall market on the basis of return on equity, TD AMERITRADE HOLDING CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
• Net operating cash flow has decreased to $242.88 million or 18.74% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

TD Ameritrade Holding Corporation, through its subsidiaries, provides securities brokerage services and technology-based financial services to retail investors, traders, and independent registered investment advisors (RIAs) in the United States. The company has a P/E ratio of 16, equal to the average financial services industry P/E ratio and below the S&P 500 P/E ratio of 17.7. TD Ameritrade Holding has a market cap of $9.47 billion and is part of the financial sector and financial services industry. Shares are up 7% year to date as of the close of trading on Friday.

You can view the full TD Ameritrade Holding Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

For more information on TD Ameritrade Holding Corporation click any of the following:

• TD Ameritrade Holding Corporation Stock Price

• TD Ameritrade Holding Corporation Analyst Ratings

• TD Ameritrade Holding Corporation Key Stats & Profile

• TD Ameritrade Holding Corporation Earnings

• TD Ameritrade Holding Corporation Ratio Comparison

• TD Ameritrade Holding Corporation Growth Rates

• TD Ameritrade Holding Corporation Balance Sheet

• TD Ameritrade Holding Corporation Cash Flow

• TD Ameritrade Holding Corporation Income Statement