NEW YORK (
) 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, largely solid financial position with reasonable debt levels by most measures and compelling growth in net income. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 8.5%. Since the same quarter one year prior, revenues rose by 27.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- LONG 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. Along with this, the company maintains a quick ratio of 8.85, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for ELONG INC is currently very high, coming in at 77.00%. 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 7.80% trails the industry average.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, ELONG INC's return on equity significantly trails that of both the industry average and the S&P 500.
- LONG's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 38.93%, which is also worse than the performance of the S&P 500 Index. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, LONG is still more expensive than most of the other companies in its industry.
eLong Inc. operates as an online travel service provider in China. The company has a P/E ratio of 54, above the average diversified services industry P/E ratio of 51.4 and above the S&P 500 P/E ratio of 17.7. eLong has a market cap of $369.8 million and is part of the
industry. Shares are down 11.8% year to date as of the close of trading on Tuesday.
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-- 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.