NEW YORK ( TheStreet) -- Telenav (Nasdaq: TNAV) 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, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and disappointing return on equity. Highlights from the ratings report include:
- TNAV's revenue growth trails the industry average of 11.9%. Since the same quarter one year prior, revenues slightly increased by 1.1%. 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.
- TNAV has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.38, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for TELENAV INC is currently very high, coming in at 78.00%. Regardless of TNAV's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TNAV's net profit margin of 12.70% is significantly lower than the same period one year prior.
- Net operating cash flow has significantly decreased to $27.75 million or 56.80% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- 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 Software industry. The net income has significantly decreased by 34.2% when compared to the same quarter one year ago, falling from $11.17 million to $7.35 million.
-- Written by a member of TheStreet RatingsStaff