NEW YORK ( TheStreet) -- Perion Network (Nasdaq: PERI) 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, attractive valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • PERI's revenue growth trails the industry average of 32.7%. Since the same quarter one year prior, revenues rose by 12.6%. 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.
  • PERI has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.80 is somewhat weak and could be cause for future problems.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 46.56%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 100.00% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • 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 Internet Software & Services industry. The net income has significantly decreased by 99.1% when compared to the same quarter one year ago, falling from $2.15 million to $0.02 million.

Perion Network Ltd., together with its subsidiaries, designs, develops, and markets content and media products to the consumer and home markets. The company has a P/E ratio of 5.1, below the average computer software & services industry P/E ratio of 5.2 and below the S&P 500 P/E ratio of 17.7. Perion Network has a market cap of $37.3 million and is part of the technology sector and computer software & services industry. Shares are unchanged year to date as of the close of trading on Tuesday.

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