CBIZ Inc. Stock Downgraded (CBZ)

NEW YORK ( TheStreet) -- CBIZ (NYSE: CBZ) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and increase in net income. However, as a counter to these strengths, we also find weaknesses including generally poor debt management, poor profit margins and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • CBIZ INC reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CBIZ INC increased its bottom line by earning $0.58 versus $0.45 in the prior year. This year, the market expects an improvement in earnings ($0.63 versus $0.58).
  • Despite the weak revenue results, CBZ has outperformed against the industry average of 11.7%. Since the same quarter one year prior, revenues slightly dropped by 1.1%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
  • The gross profit margin for CBIZ INC is currently extremely low, coming in at 2.00%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -0.70% trails that of the industry average.
  • The debt-to-equity ratio of 1.07 is relatively high when compared with the industry average, suggesting a need for better debt level management.
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CBIZ, Inc. provides professional business services, products, and solutions to businesses, individuals, governmental entities, and not-for-profit enterprises in the United States and Canada. The company has a P/E ratio of 10.9, above the average diversified services industry P/E ratio of 10.7 and below the S&P 500 P/E ratio of 17.7. CBIZ has a market cap of $309.3 million and is part of the services sector and diversified services industry. Shares are up 8% year to date as of the close of trading on Friday.

You can view the full CBIZ Ratings Report or get investment ideas from our investment research center.
-- Written by a member of TheStreet Ratings Staff
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