NEW YORK ( TheStreet) -- CTC Media (Nasdaq: CTCM) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and weak operating cash flow.

Highlights from the ratings report include:
  • CTCM's very impressive revenue growth greatly exceeded the industry average of 19.5%. Since the same quarter one year prior, revenues leaped by 56.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.30 is sturdy.
  • CTCM's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 41.83%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, CTCM is still more expensive than most of the other companies in its industry.
  • Net operating cash flow has decreased to $26.28 million or 42.45% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

CTC Media, Inc. operates as an independent broadcasting company in Russia. It owns and operates the CTC, Domashny, and DTV television networks in Russia. The company has a P/E ratio of 12, below the average media industry P/E ratio of 12.2 and below the S&P 500 P/E ratio of 17.7. CTC Media has a market cap of $2 billion and is part of the services sector and media industry. Shares are down 49.9% year to date as of the close of trading on Tuesday.

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