NEW YORK ( TheStreet) -- Washington Post Company (NYSE: WPO) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, notable return on equity and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The gross profit margin for WASHINGTON POST is rather high; currently it is at 58.00%. Regardless of WPO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 6.60% trails the industry average.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Media industry and the overall market on the basis of return on equity, WASHINGTON POST has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Although WPO's debt-to-equity ratio of 0.14 is very low, it is currently higher than that of the industry average. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.26, which illustrates the ability to avoid short-term cash problems.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 4.5%. Since the same quarter one year prior, revenues slightly increased by 0.3%. 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.

The Washington Post Company, together with its subsidiaries, operates as a diversified education and media company in the United States and internationally. The company has a P/E ratio of 12.4, below the average media industry P/E ratio of 13.7 and below the S&P 500 P/E ratio of 16.7. Washington Post has a market cap of $2.9 billion and is part of the services sector and media industry. Shares are down 5.2% year to date as of the close of trading on Monday.

You can view the full Washington Post Ratings Report or get investment ideas from our investment research center.

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