Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. NEW YORK (TheStreet) -- KKR (NYSE:KKR) 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, notable return on equity and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and feeble growth in the company's earnings per share.
- KKR's very impressive revenue growth greatly exceeded the industry average of 12.5%. Since the same quarter one year prior, revenues leaped by 79.8%. 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.
- 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. Compared to other companies in the Capital Markets industry and the overall market, KKR & CO LP's return on equity exceeds that of both the industry average and the S&P 500.
- 43.77% is the gross profit margin for KKR & CO LP which we consider to be strong. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, KKR's net profit margin of 3.00% significantly trails the industry average.
- 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 Capital Markets industry. The net income has significantly decreased by 89.7% when compared to the same quarter one year ago, falling from $146.26 million to $15.13 million.
- Net operating cash flow has significantly decreased to $828.43 million or 65.07% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
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