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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 notable return on equity, solid stock price performance and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and generally higher debt management risk.
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Highlights from the ratings report include:
- 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 Internet Software & Services industry and the overall market, VISTAPRINT NV's return on equity exceeds that of both the industry average and the S&P 500.
- Compared to its closing price of one year ago, VPRT's share price has jumped by 29.06%, exceeding the performance of the broader market during that same time frame. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
- VPRT, with its decline in revenue, underperformed when compared the industry average of 20.6%. Since the same quarter one year prior, revenues slightly dropped by 0.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- 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 Internet Software & Services industry. The net income has significantly decreased by 76.5% when compared to the same quarter one year ago, falling from $5.87 million to $1.38 million.
- Net operating cash flow has significantly decreased to $3.14 million or 61.37% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
Vistaprint N.V. operates as an online provider of coordinated portfolios of marketing products and services to micro businesses worldwide. The company has a P/E ratio of 35.1, above the S&P 500 P/E ratio of 17.7. VistaPrint has a market cap of $1.78 billion and is part of the services sector and diversified services industry. Shares are down 6% year to date as of the close of trading on Thursday.
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