NEW YORK ( TheStreet) -- Grupo Televisa (NYSE: TV) 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, notable return on equity 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 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 Media industry. The net income has decreased by 15.2% when compared to the same quarter one year ago, dropping from $86.13 million to $73.06 million.
  • The debt-to-equity ratio of 1.22 is relatively high when compared with the industry average, suggesting a need for better debt level management. Regardless of the company's weak debt-to-equity ratio, TV has managed to keep a strong quick ratio of 1.76, which demonstrates the ability to cover short-term cash needs.
  • 49.10% is the gross profit margin for GRUPO TELEVISA SAB which we consider to be strong. Regardless of TV'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.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Media industry and the overall market, GRUPO TELEVISA SAB's return on equity exceeds that of both the industry average and the S&P 500.
  • TV's revenue growth has slightly outpaced the industry average of 11.4%. 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.

Grupo Televisa, S.A.B., together with its subsidiaries, operates as a media company in Mexico and internationally. It operates in six segments: Television Broadcasting, Pay Television Networks, Programming Exports, Publishing, Sky, and Cable and Telecom. The company has a P/E ratio of 21.2, above the S&P 500 P/E ratio of 17.7. Grupo Televisa has a market cap of $12.8 billion and is part of the services sector and media industry. Shares are down 11.2% year to date as of the close of trading on Monday.

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