NEW YORK ( TheStreet) -- LHC Group (Nasdaq: LHCG) 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, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, unimpressive growth in net income and feeble growth in the company's earnings per share.
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- LHCG's revenue growth trails the industry average of 13.6%. Since the same quarter one year prior, revenues slightly increased by 2.0%. 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.
- LHCG's debt-to-equity ratio is very low at 0.08 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, LHCG has a quick ratio of 1.67, which demonstrates the ability of the company to cover short-term liquidity needs.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- The change in net income from the same quarter one year ago has exceeded that of the Health Care Providers & Services industry average, but is less than that of the S&P 500. The net income has decreased by 18.8% when compared to the same quarter one year ago, dropping from $7.74 million to $6.29 million.
- Net operating cash flow has decreased to $14.07 million or 45.01% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, LHC GROUP INC has marginally lower results.