Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. NEW YORK ( TheStreet) -- Viasat (Nasdaq: VSAT) 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, solid stock price performance and increase in net income. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and weak operating cash flow.
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- The revenue growth came in higher than the industry average of 14.8%. Since the same quarter one year prior, revenues rose by 28.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 123.52% and other important driving factors, this stock has surged by 73.47% over the past year, outperforming the rise in the S&P 500 Index during the same period. Although VSAT had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
- VIASAT INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, VIASAT INC swung to a loss, reporting -$0.94 versus $0.17 in the prior year. This year, the market expects an improvement in earnings ($0.81 versus -$0.94).
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Communications Equipment industry and the overall market, VIASAT INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has decreased to $42.66 million or 44.22% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.