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 (
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we find that revenues have generally been declining.
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Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Media industry. The net income increased by 394.4% when compared to the same quarter one year prior, rising from -$0.32 million to $0.95 million.
- HPOL's debt-to-equity ratio is very low at 0.17 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 1.05, which illustrates the ability to avoid short-term cash problems.
- 40.80% is the gross profit margin for HARRIS INTERACTIVE INC which we consider to be strong. 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 2.83% trails the industry average.
- HPOL, with its decline in revenue, slightly underperformed the industry average of 4.7%. Since the same quarter one year prior, revenues slightly dropped by 1.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- Powered by its strong earnings growth of 300.00% and other important driving factors, this stock has surged by 40.49% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
Harris Interactive Inc. operates as a consultative market research company primarily in North America, Europe, Canada, the United Kingdom, France, and Germany. The company has a P/E ratio of 32.4, above the S&P 500 P/E ratio of 17.7. Harris Interactive has a market cap of $93.6 million and is part of the services sector and diversified services industry. Shares are up 35% year to date as of the close of trading on Friday.
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-- Written by a member of TheStreet Ratings Staff
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