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) -- ChinaCache International Holdings (Nasdaq: CCIH) 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 expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.
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- CCIH's revenue growth has slightly outpaced the industry average of 22.6%. Since the same quarter one year prior, revenues rose by 28.6%. 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.
- CCIH 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. To add to this, CCIH has a quick ratio of 1.76, which demonstrates the ability of the company to cover short-term liquidity needs.
- 35.32% is the gross profit margin for CHINACACHE INTL HLDGS -ADR which we consider to be strong. Regardless of CCIH's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CCIH's net profit margin of -3.67% significantly underperformed when compared to the industry average.
- 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 Internet Software & Services industry. The net income has significantly decreased by 441.3% when compared to the same quarter one year ago, falling from $0.40 million to -$1.37 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Internet Software & Services industry and the overall market, CHINACACHE INTL HLDGS -ADR's return on equity significantly trails that of both the industry average and the S&P 500.