NEW YORK ( TheStreet) -- Endurance Specialty Holdings (NYSE: ENH) 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 and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity. Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 20.7%. 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, displayed by a decline in earnings per share.
- ENH's debt-to-equity ratio is very low at 0.20 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
- Compared to its price level of one year ago, ENH is down 10.15% to its most recent closing price of 37.20. Looking ahead, our view is that this company's fundamentals will not have much impact either way, allowing the stock to generally move up or down based on the push and pull of the broad market.
- The gross profit margin for ENDURANCE SPECIALTY HOLDINGS is currently extremely low, coming in at 7.90%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -3.50% is significantly below that of the industry average.
- Net operating cash flow has significantly decreased to $49.25 million or 71.76% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.