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) -- Bitauto Holdings (NYSE: BITA) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.
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- BITA's very impressive revenue growth exceeded the industry average of 29.6%. Since the same quarter one year prior, revenues leaped by 56.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- BITA has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 2.71, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for BITAUTO HOLDINGS LTD -ADR is currently very high, coming in at 70.40%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 16.96% trails the industry average.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Internet Software & Services industry and the overall market on the basis of return on equity, BITAUTO HOLDINGS LTD -ADR has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
-- Written by a member of TheStreet Ratings Staff