NEW YORK ( TheStreet) -- IRSA Inversiones Y Representaciones S.A. GD (NYSE: IRS) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels and growth in earnings per share. However, as a counter to these strengths, we find that the company's return on equity has been disappointing. Highlights from the ratings report include:
- 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 Real Estate Management & Development industry and the overall market on the basis of return on equity, IRSA INVERSIONES Y REPSTN SA has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- In its most recent trading session, IRS has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.
- IRSA INVERSIONES Y REPSTN SA reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, IRSA INVERSIONES Y REPSTN SA increased its bottom line by earning $1.47 versus $0.73 in the prior year. For the next year, the market is expecting a contraction of 24.1% in earnings ($1.12 versus $1.47).
- IRS's revenue growth trails the industry average of 13.6%. Since the same quarter one year prior, revenues slightly increased by 1.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.