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) -- CH Robinson Worldwide (Nasdaq:CHRW) has been downgraded by TheStreet Ratings from buy to hold. 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 notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and weak operating cash flow.
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- The revenue growth came in higher than the industry average of 4.7%. Since the same quarter one year prior, revenues rose by 17.3%. 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.
- CHRW's debt-to-equity ratio is very low at 0.26 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.30, which illustrates the ability to avoid short-term cash problems.
- C H ROBINSON WORLDWIDE INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, C H ROBINSON WORLDWIDE INC increased its bottom line by earning $3.66 versus $2.63 in the prior year. For the next year, the market is expecting a contraction of 20.6% in earnings ($2.91 versus $3.66).
- The gross profit margin for C H ROBINSON WORLDWIDE INC is rather low; currently it is at 15.70%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.45% trails that of the industry average.
- Net operating cash flow has significantly decreased to -$58.05 million or 175.30% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
-- Written by a member of TheStreet Ratings Staff
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