NEW YORK ( TheStreet) -- YPF Sociedad Anonima (NYSE: YPF) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and disappointing return on equity. Highlights from the ratings report include:
- YPF's revenue growth has slightly outpaced the industry average of 22.9%. Since the same quarter one year prior, revenues rose by 23.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The net income growth from the same quarter one year ago has exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income increased by 5.3% when compared to the same quarter one year prior, going from $379.10 million to $399.03 million.
- YPF's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 49.22%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, YACIMIENTOS PETE FISCALES SA has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.
-- Written by a member of TheStreet Ratings Staff