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

)

-- National CineMedia

(Nasdaq:

NCMI

) 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, expanding profit margins and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and weak operating cash flow.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

Highlights from the ratings report include:

  • NCMI's revenue growth has slightly outpaced the industry average of 3.8%. Since the same quarter one year prior, revenues slightly increased by 5.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The gross profit margin for NATIONAL CINEMEDIA INC is rather high; currently it is at 68.54%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 15.48% is above that of the industry average.
  • NATIONAL CINEMEDIA INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, NATIONAL CINEMEDIA INC increased its bottom line by earning $0.71 versus $0.24 in the prior year. For the next year, the market is expecting a contraction of 24.6% in earnings ($0.54 versus $0.71).
  • In its most recent trading session, NCMI has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
  • Net operating cash flow has decreased to $39.20 million or 20.64% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, NATIONAL CINEMEDIA INC has marginally lower results.

National CineMedia, Inc., through its subsidiaries, operates a digital in-theatre media network in North America. The company operates through two segments, Advertising and Fathom Events. National CineMedia has a market cap of $897 million and is part of the services sector and media industry. Shares are down 25.8% year to date as of the close of trading on Friday.

You can view the full

National CineMedia Ratings Report

or get investment ideas from our

investment research center

.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more

.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.