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) -- SodaStream International (Nasdaq: SODA) has been downgraded by TheStreet Ratings from buy 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 good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and disappointing return on equity.
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- SODA's revenue growth has slightly outpaced the industry average of 26.5%. Since the same quarter one year prior, revenues rose by 28.5%. 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.
- SODA's debt-to-equity ratio is very low at 0.06 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.02, which illustrates the ability to avoid short-term cash problems.
- Net operating cash flow has increased to $4.95 million or 13.75% when compared to the same quarter last year. Despite an increase in cash flow, SODASTREAM INTERNATIONAL LTD's average is still marginally south of the industry average growth rate of 22.46%.
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Household Durables industry average. The net income has decreased by 2.2% when compared to the same quarter one year ago, dropping from $16.77 million to $16.40 million.
- Looking at the price performance of SODA's shares over the past 12 months, there is not much good news to report: the stock is down 26.99%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.