NEW YORK ( TheStreet) -- Willis Lease Finance Corporation (Nasdaq: WLFC) 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 solid stock price performance. However, as a counter to these strengths, we also find weaknesses including generally poor debt management and disappointing return on equity. Highlights from the ratings report include:
- WLFC's revenue growth has slightly outpaced the industry average of 15.3%. Since the same quarter one year prior, revenues rose by 18.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 158.33% and other important driving factors, this stock has surged by 31.51% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- The gross profit margin for WILLIS LEASE FINANCE CORP is currently very high, coming in at 70.60%. Regardless of WLFC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, WLFC's net profit margin of 9.00% compares favorably to the industry average.
- The debt-to-equity ratio is very high at 3.39 and currently higher than the industry average, implying that there is very poor management of debt levels within the company.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Trading Companies & Distributors industry and the overall market, WILLIS LEASE FINANCE CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.