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) -- Community Health Systems (NYSE: CYH) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.
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- COMMUNITY HEALTH SYSTEMS INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, COMMUNITY HEALTH SYSTEMS INC increased its bottom line by earning $2.96 versus $2.86 in the prior year. This year, the market expects an improvement in earnings ($2.99 versus $2.96).
- CYH, with its decline in revenue, slightly underperformed the industry average of 4.0%. Since the same quarter one year prior, revenues slightly dropped by 0.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- 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 Health Care Providers & Services industry. The net income has significantly decreased by 64.3% when compared to the same quarter one year ago, falling from $83.36 million to $29.75 million.
- The gross profit margin for COMMUNITY HEALTH SYSTEMS INC is currently extremely low, coming in at 14.16%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.91% trails that of the industry average.