NEW YORK ( TheStreet) -- eHealth (Nasdaq: EHTH) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, solid stock price performance and notable return on equity. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • 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 Insurance industry. The net income has significantly decreased by 109.6% when compared to the same quarter one year ago, falling from $2.60 million to -$0.25 million.
  • Net operating cash flow has declined marginally to $5.41 million or 3.52% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

eHealth, Inc. offers Internet-based insurance agency services for individuals, families, and small businesses in the United States. The company also offers technology licensing and Internet advertising services. The company has a P/E ratio of 19.3, below the average insurance industry P/E ratio of 22.2 and above the S&P 500 P/E ratio of 17.7. eHealth has a market cap of $322.6 million and is part of the financial sector and insurance industry. Shares are up 6.2% year to date as of the close of trading on Wednesday.

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