NEW YORK ( TheStreet) -- TeleTech Holdings (Nasdaq: TTEC) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins. Highlights from the ratings report include:
- The gross profit margin for TELETECH HOLDINGS INC is currently lower than what is desirable, coming in at 27.70%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.60% significantly trails the industry average.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the IT Services industry and the overall market, TELETECH HOLDINGS INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- TTEC, with its decline in revenue, underperformed when compared the industry average of 10.7%. Since the same quarter one year prior, revenues slightly dropped by 0.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Net operating cash flow has significantly increased by 81.37% to $14.50 million when compared to the same quarter last year. In addition, TELETECH HOLDINGS INC has also vastly surpassed the industry average cash flow growth rate of 11.89%.
- TTEC's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, TTEC has a quick ratio of 2.19, which demonstrates the ability of the company to cover short-term liquidity needs.