NEW YORK ( TheStreet) -- KKR (NYSE: KKR) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and increase in net income. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.
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- The revenue growth greatly exceeded the industry average of 30.2%. Since the same quarter one year prior, revenues rose by 17.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 269.1% when compared to the same quarter one year prior, rising from $39.62 million to $146.26 million.
- KKR & CO LP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. 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, KKR & CO LP reported lower earnings of $0.04 versus $1.61 in the prior year. This year, the market expects an improvement in earnings ($2.72 versus $0.04).
- Powered by its strong earnings growth of 222.22% and other important driving factors, this stock has surged by 33.04% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. When compared to other companies in the Capital Markets industry and the overall market, KKR & CO LP's return on equity is below that of both the industry average and the S&P 500.
-- Written by a member of TheStreet Ratings Staff