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) -- Charter Communications (Nasdaq: CHTR) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and disappointing return on equity.
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- Compared to its closing price of one year ago, CHTR's share price has jumped by 38.25%, 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.
- CHTR's revenue growth trails the industry average of 16.0%. Since the same quarter one year prior, revenues slightly increased by 3.9%. 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 CHARTER COMMUNICATIONS INC is rather high; currently it is at 54.40%. Regardless of CHTR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CHTR's net profit margin of -4.62% significantly underperformed when compared to the industry average.
- The debt-to-equity ratio is very high at 79.13 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, CHTR has a quick ratio of 0.54, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
- 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. Compared to other companies in the Media industry and the overall market, CHARTER COMMUNICATIONS INC's return on equity significantly trails that of both the industry average and the S&P 500.
-- Written by a member of TheStreet Ratings Staff