NEW YORK (
) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and increase in net income. However, as a counter to these strengths, we also find weaknesses including generally poor debt management and weak operating cash flow.
Highlights from the ratings report include:
- WWWW's very impressive revenue growth greatly exceeded the industry average of 24.8%. Since the same quarter one year prior, revenues leaped by 95.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- WEB.COM GROUP INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, WEB.COM GROUP INC reported poor results of -$0.39 versus -$0.28 in the prior year. This year, the market expects an improvement in earnings ($1.47 versus -$0.39).
- Net operating cash flow has decreased to $4.45 million or 34.60% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- The debt-to-equity ratio is very high at 2.62 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.14, which clearly demonstrates the inability to cover short-term cash needs.
Web.com Group, Inc. provides Internet services and online marketing solutions for small-to-medium sized businesses to build and maintain an online presence. The company has a P/E ratio of 13.2, below the S&P 500 P/E ratio of 17.7. Web.com Group has a market cap of $610.4 million and is part of the
industry. Shares are up 21.4% year to date as of the close of trading on Tuesday.
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-- Written by a member of TheStreet RatingsStaff