NEW YORK ( TheStreet) -- Inc (Nasdaq: SOHU) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, robust revenue growth and good cash flow from operations. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:
  • Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.41 is very high and demonstrates very strong liquidity.
  • SOHU's revenue growth has slightly outpaced the industry average of 27.1%. Since the same quarter one year prior, revenues rose by 36.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The gross profit margin for SOHU.COM INC is currently very high, coming in at 76.30%. Regardless of SOHU'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 22.30% trails the industry average.
  • 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. Compared to other companies in the Internet Software & Services industry and the overall market, SOHU.COM INC's return on equity exceeds that of both the industry average and the S&P 500.
  • SOHU has underperformed the S&P 500 Index, declining 6.87% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time. Inc., through its subsidiaries, engages in the brand advertising, online gaming, sponsored search, and wireless businesses in China. The company has a P/E ratio of 13.3, below the average internet industry P/E ratio of 13.5 and below the S&P 500 P/E ratio of 17.7. has a market cap of $2.2 billion and is part of the technology sector and internet industry. Shares are down 13.2% year to date as of the close of trading on Thursday.

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

If you liked this article you might like

Cyber Monday? So Passé. Asia's Online Retailers Are the Stocks to Shop

Cyber Monday? So Passé. Asia's Online Retailers Are the Stocks to Shop

The Stock Market Looks Like It Could End July With a Bang