NEW YORK ( TheStreet) -- Ship Finance International (NYSE: SFL) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally poor debt management and feeble growth in the company's earnings per share. Highlights from the ratings report include:
- SFL's revenue growth trails the industry average of 25.2%. Since the same quarter one year prior, revenues slightly increased by 6.9%. 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 gross profit margin for SHIP FINANCE INTL LTD is currently very high, coming in at 72.50%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 39.60% significantly outperformed against the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry average. The net income has decreased by 1.2% when compared to the same quarter one year ago, dropping from $30.52 million to $30.16 million.
- The debt-to-equity ratio is very high at 2.23 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, SFL maintains a poor quick ratio of 0.74, which illustrates the inability to avoid short-term cash problems.
-- Written by a member of TheStreet RatingsStaff