NEW YORK ( TheStreet) -- QC Holdings (Nasdaq: QCCO) 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, largely solid financial position with reasonable debt levels by most measures and attractive valuation levels. 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 poor profit margins. Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 3.5%. Since the same quarter one year prior, revenues slightly increased by 2.6%. 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.
- The debt-to-equity ratio is somewhat low, currently at 0.66, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. To add to this, QCCO has a quick ratio of 1.66, which demonstrates the ability of the company to cover short-term liquidity needs.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Consumer Finance industry. The net income has decreased by 12.6% when compared to the same quarter one year ago, dropping from $2.04 million to $1.78 million.
- The gross profit margin for QC HOLDINGS INC is currently lower than what is desirable, coming in at 31.20%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.70% significantly trails the industry average.