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) -- Liberty Global (Nasdaq: LBTYA) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and generally higher debt management risk.
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- The revenue growth came in higher than the industry average of 0.5%. Since the same quarter one year prior, revenues rose by 25.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 95.06% and other important driving factors, this stock has surged by 35.66% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- The gross profit margin for LIBERTY GLOBAL PLC is rather high; currently it is at 62.96%. Regardless of LBTYA'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 -0.36% 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 101.7% when compared to the same quarter one year ago, falling from $701.60 million to -$11.60 million.
- Although LBTYA's debt-to-equity ratio of 3.48 is very high, it is currently less than that of the industry average. To add to this, LBTYA has a quick ratio of 0.51, this demonstrates the lack of ability of the company to cover short-term liquidity needs.