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) -- Entravision Communications Corporation (NYSE: EVC) 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, revenue growth and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.
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- Compared to other companies in the Media industry and the overall market, ENTRAVISION COMMUNICATIONS's return on equity significantly exceeds that of both the industry average and the S&P 500.
- EVC's revenue growth has slightly outpaced the industry average of 0.5%. Since the same quarter one year prior, revenues slightly increased by 4.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The gross profit margin for ENTRAVISION COMMUNICATIONS is rather high; currently it is at 54.37%. Regardless of EVC'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 8.90% trails the industry average.
- Powered by its strong earnings growth of 200.00% and other important driving factors, this stock has surged by 305.30% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
- The debt-to-equity ratio is very high at 24.10 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Regardless of the company's weak debt-to-equity ratio, EVC has managed to keep a strong quick ratio of 2.45, which demonstrates the ability to cover short-term cash needs.