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 (
-- ICG Group
) 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, compelling growth in net income and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share and poor profit margins.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 5.3%. Since the same quarter one year prior, revenues rose by 33.5%. 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.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
- The gross profit margin for ICG GROUP INC is currently lower than what is desirable, coming in at 29.20%. It has decreased from the same quarter the previous year. Despite the weak results of the gross profit margin, the net profit margin of 41.14% has significantly outperformed against the industry average.
- ICG GROUP INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, ICG GROUP INC reported lower earnings of $0.72 versus $0.81 in the prior year. For the next year, the market is expecting a contraction of 203.5% in earnings (-$0.75 versus $0.72).
ICG Group, Inc. is a private equity and venture capital firm specializing in growth capital, acquisitions, and mid and late venture investments in public and private companies. The company has a P/E ratio of 15.6, below the S&P 500 P/E ratio of 17.7. ICG Group has a market cap of $419.9 million and is part of the technology sector and computer software & services industry. Shares are down 2% 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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