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) -- Nexstar Broadcasting Group (Nasdaq: NXST) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its notable return on equity, robust revenue growth and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and generally higher debt management risk.
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- Compared to other companies in the Media industry and the overall market, NEXSTAR BROADCASTING GROUP's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The revenue growth greatly exceeded the industry average of 2.5%. Since the same quarter one year prior, revenues rose by 42.0%. 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.
- The gross profit margin for NEXSTAR BROADCASTING GROUP is rather high; currently it is at 64.09%. Regardless of NXST's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 5.04% trails 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 Media industry. The net income has significantly decreased by 27.8% when compared to the same quarter one year ago, falling from $8.82 million to $6.37 million.
- Net operating cash flow has significantly decreased to $0.73 million or 95.54% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.