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 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, weak operating cash flow and feeble growth in the company's earnings per share.
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- The revenue growth came in higher than the industry average of 3.9%. Since the same quarter one year prior, revenues rose by 18.9%. 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, NXST's share price has jumped by 108.44%, 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 NEXSTAR BROADCASTING GROUP is rather high; currently it is at 64.92%. 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, NXST's net profit margin of -9.01% significantly underperformed when compared to 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 107.7% when compared to the same quarter one year ago, falling from $161.10 million to -$12.45 million.
- Net operating cash flow has significantly decreased to -$18.39 million or 264.79% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.