NEW YORK ( TheStreet) -- Telecom Italia SPA (NYSE: TI.A) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally poor debt management and feeble growth in the company's earnings per share. Highlights from the ratings report include:
- The debt-to-equity ratio of 1.35 is relatively high when compared with the industry average, suggesting a need for better debt level management.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Diversified Telecommunication Services industry. The net income has decreased by 6.9% when compared to the same quarter one year ago, dropping from $812.91 million to $756.61 million.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. 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.
- Despite its growing revenue, the company underperformed as compared with the industry average of 13.3%. Since the same quarter one year prior, revenues rose by 12.2%. 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.