Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model. NEW YORK ( TheStreet) -- Boise (NYSE: BZ) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.
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- Compared to its closing price of one year ago, BZ's share price has jumped by 32.89%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- Despite its growing revenue, the company underperformed as compared with the industry average of 2.8%. Since the same quarter one year prior, revenues slightly increased by 2.1%. 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.
- Net operating cash flow has increased to $92.15 million or 16.98% when compared to the same quarter last year. Despite an increase in cash flow, BOISE INC's average is still marginally south of the industry average growth rate of 23.15%.
- 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. When compared to other companies in the Containers & Packaging industry and the overall market, BOISE INC's return on equity is below that of both the industry average and the S&P 500.
- The gross profit margin for BOISE INC is rather low; currently it is at 21.80%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.55% trails that of the industry average.
-- Written by a member of TheStreet Ratings Staff