NEW YORK ( TheStreet) -- Crawford & Company (NYSE: CRD.B) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, notable return on equity and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and generally poor debt management. Highlights from the ratings report include:
- Compared to its closing price of one year ago, CRD.B's share price has jumped by 31.78%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Insurance industry and the overall market, CRAWFORD & CO's return on equity significantly exceeds that of both the industry average and the S&P 500.
- CRD.B, with its decline in revenue, slightly underperformed the industry average of 7.0%. Since the same quarter one year prior, revenues fell by 12.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- 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 Insurance industry. The net income has significantly decreased by 69.7% when compared to the same quarter one year ago, falling from $14.81 million to $4.49 million.
- The gross profit margin for CRAWFORD & CO is rather low; currently it is at 24.40%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.60% trails that of the industry average.
-- Written by a member of TheStreet Ratings Staff