NEW YORK ( TheStreet) -- QuinStreet (Nasdaq: QNST) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and a generally disappointing performance in the stock itself. Highlights from the ratings report include:
- Although QNST's debt-to-equity ratio of 0.28 is very low, it is currently higher than that of the industry average. Along with this, the company maintains a quick ratio of 2.79, which clearly demonstrates the ability to cover short-term cash needs.
- In comparison to the other companies in the Internet Software & Services industry and the overall market, QUINSTREET INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- 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 26.8% when compared to the same quarter one year ago, falling from $7.50 million to $5.49 million.
- The gross profit margin for QUINSTREET INC is currently lower than what is desirable, coming in at 32.20%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 5.40% significantly trails the industry average.