NEW YORK ( TheStreet) -- Teekay Corp (NYSE: TK) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally poor debt management and disappointing return on equity.

Highlights from the ratings report include:
  • Net operating cash flow has significantly decreased to -$84.96 million or 189.64% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, TEEKAY CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The revenue fell significantly faster than the industry average of 24.1%. Since the same quarter one year prior, revenues slightly dropped by 9.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 44.70% is the gross profit margin for TEEKAY CORP which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -6.10% is in-line with the industry average.
  • Compared to its closing price of one year ago, TK's share price has jumped by 36.17%, exceeding the performance of the broader market during that same time frame. Although TK had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.

Teekay Corporation provides crude oil and petroleum product transportation services in Bermuda and internationally. The company has a P/E ratio of 15.5, below the S&P 500 P/E ratio of 17.7. Teekay has a market cap of $2.5 billion and is part of the services sector and transportation industry. Shares are up 5.8% year to date as of the close of trading on Friday.

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