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Bitauto Holdings Ltd. Stock Upgraded (BITA)

Editor's Note: 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.

NEW YORK (TheStreet) -- Bitauto Holdings (NYSE:BITA) has been upgraded by TheStreet Ratings from sell to hold. 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 solid stock price performance. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

Highlights from the ratings report include:

  • BITA's very impressive revenue growth exceeded the industry average of 44.4%. Since the same quarter one year prior, revenues leaped by 58.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • BITA 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. To add to this, BITA has a quick ratio of 2.31, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for BITAUTO HOLDINGS LTD -ADR is currently very high, coming in at 73.20%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 11.80% trails the industry average.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Internet Software & Services industry and the overall market, BITAUTO HOLDINGS LTD -ADR's return on equity is below that of both the industry average and the S&P 500.
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Bitauto Holdings Limited provides Internet content and marketing services for the automotive industry, primarily in the People's Republic of China. It operates in three segments: Bitauto.com Business, Taoche.com Business, and Digital Marketing Solutions. The company has a P/E ratio of 20, above the S&P 500 P/E ratio of 17.7. Bitauto has a market cap of $274.8 million and is part of the technology sector and internet industry. Shares are up 65% year to date as of the close of trading on Friday.

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

-- Written by a member of TheStreet Ratings Staff

Editor's Note: 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.

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