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) -- Crown Castle International (NYSE: CCI) 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, good cash flow from operations and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and premium valuation.
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- The revenue growth came in higher than the industry average of 4.3%. Since the same quarter one year prior, revenues rose by 29.8%. 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 $248.10 million or 31.84% when compared to the same quarter last year. In addition, CROWN CASTLE INTL CORP has also vastly surpassed the industry average cash flow growth rate of -32.75%.
- Compared to its closing price of one year ago, CCI's share price has jumped by 63.14%, exceeding the performance of the broader market during that same time frame. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
- 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 Wireless Telecommunication Services industry. The net income has significantly decreased by 139.9% when compared to the same quarter one year ago, falling from $48.91 million to -$19.51 million.
- The debt-to-equity ratio is very high at 3.95 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, CCI maintains a poor quick ratio of 0.98, which illustrates the inability to avoid short-term cash problems.
-- Written by a member of TheStreet Ratings Staff