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) -- IntercontinentalExchange Group (NYSE: ICE) 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, solid stock price performance and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and generally higher debt management risk.
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- ICE's very impressive revenue growth greatly exceeded the industry average of 13.4%. Since the same quarter one year prior, revenues leaped by 89.3%. 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.
- Compared to its closing price of one year ago, ICE's share price has jumped by 45.28%, exceeding the performance of the broader market during that same time frame. 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 INTERCONTINENTALEXCHANGE GRP is currently very high, coming in at 74.18%. Regardless of ICE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ICE's net profit margin of -28.75% significantly underperformed when compared to the industry average.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Diversified Financial Services industry and the overall market on the basis of return on equity, INTERCONTINENTALEXCHANGE GRP underperformed against that of the industry average and is significantly less than that of the S&P 500.
- 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 Diversified Financial Services industry. The net income has significantly decreased by 235.9% when compared to the same quarter one year ago, falling from $129.47 million to -$176.00 million.