NEW YORK ( TheStreet) -- YPF Sociedad Anonima (NYSE: YPF) 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, reasonable valuation levels and notable return on equity. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:
  • YPF's revenue growth trails the industry average of 37.4%. Since the same quarter one year prior, revenues rose by 23.4%. 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.
  • 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. In comparison to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, YACIMIENTOS PETE FISCALES SA has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.
  • Net operating cash flow has decreased to $349.67 million or 48.42% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 42.3% when compared to the same quarter one year ago, falling from $402.24 million to $232.09 million.

YPF SOCIEDAD ANONIMA, an energy company, engages in the exploration, development, and production of crude oil, natural gas, and liquefied petroleum gas (LPG) in Argentina. The company has a P/E ratio of 9.6, below the average energy industry P/E ratio of 19.8 and below the S&P 500 P/E ratio of 17.7. YPF Sociedad Anonima has a market cap of $13.9 billion and is part of the basic materials sector and energy industry. Shares are down 29.1% year to date as of the close of trading on Tuesday.

You can view the full YPF Sociedad Anonima Ratings Report or get investment ideas from our investment research center.
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