NEW YORK ( TheStreet) -- Ritchie Bros. Auctioneers (NYSE: RBA) 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, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, feeble growth in the company's earnings per share and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 0.3%. Since the same quarter one year prior, revenues rose by 10.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • Although RBA's debt-to-equity ratio of 0.27 is very low, it is currently higher than that of the industry average. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.05, which illustrates the ability to avoid short-term cash problems.
  • The net income growth from the same quarter one year ago has exceeded that of the Commercial Services & Supplies industry average, but is less than that of the S&P 500. The net income increased by 2.5% when compared to the same quarter one year prior, going from $26.12 million to $26.76 million.
  • RITCHIE BROS AUCTIONEERS INC reported flat earnings per share in the most recent quarter. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, RITCHIE BROS AUCTIONEERS INC reported lower earnings of $0.63 versus $0.89 in the prior year.
  • 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. When compared to other companies in the Commercial Services & Supplies industry and the overall market, RITCHIE BROS AUCTIONEERS INC's return on equity is below that of both the industry average and the S&P 500.

Ritchie Bros. Auctioneers Incorporated, an industrial auctioneer, sells various equipment to on-site and online bidders worldwide. The company has a P/E ratio of 27.8, above the average diversified services industry P/E ratio of 27.4 and above the S&P 500 P/E ratio of 17.7. Ritchie Bros. Auctioneers has a market cap of $1.9 billion and is part of the services sector and diversified services industry. Shares are down 19.2% year to date as of the close of trading on Monday.

You can view the full Ritchie Bros. Auctioneers Ratings Report or get investment ideas from our investment research center.
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