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) -- Avis Budget Group (Nasdaq: CAR) 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, notable return on equity and solid stock price performance. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall.
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- CAR's revenue growth has slightly outpaced the industry average of 1.9%. Since the same quarter one year prior, revenues slightly increased by 4.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Road & Rail industry and the overall market, AVIS BUDGET GROUP INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Road & Rail industry. The net income increased by 72.9% when compared to the same quarter one year prior, rising from -$170.00 million to -$46.00 million.
- Net operating cash flow has increased to $365.00 million or 19.28% when compared to the same quarter last year. Despite an increase in cash flow, AVIS BUDGET GROUP INC's average is still marginally south of the industry average growth rate of 22.53%.
-- Written by a member of TheStreet Ratings Staff