NEW YORK ( TheStreet) -- Charm Communications (Nasdaq: CHRM) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its notable return on equity, robust 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 poor profit margins and a generally disappointing performance in the stock itself. Highlights from the ratings report include:
- Compared to other companies in the Media industry and the overall market, CHARM COMMUNICATIONS INC's return on equity exceeds that of both the industry average and the S&P 500.
- The revenue growth came in higher than the industry average of 18.1%. Since the same quarter one year prior, revenues rose by 45.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The net income growth from the same quarter one year ago has exceeded that of the Media industry average, but is less than that of the S&P 500. The net income increased by 16.3% when compared to the same quarter one year prior, going from $10.90 million to $12.68 million.
- CHRM has underperformed the S&P 500 Index, declining 5.91% 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.
- The gross profit margin for CHARM COMMUNICATIONS INC is currently lower than what is desirable, coming in at 32.10%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 18.10% is above that of the industry average.