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) -- NeuStar (NYSE: NSR) 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, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.
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- The revenue growth came in higher than the industry average of 20.1%. Since the same quarter one year prior, revenues slightly increased by 6.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- Even though the current debt-to-equity ratio is 1.35, it is still below the industry average, suggesting that this level of debt is acceptable within the IT Services industry. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.60 is very high and demonstrates very strong liquidity.
- The change in net income from the same quarter one year ago has significantly exceeded that of the IT Services industry average, but is less than that of the S&P 500. The net income has decreased by 6.2% when compared to the same quarter one year ago, dropping from $33.76 million to $31.68 million.
- NSR's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 30.19%, which is also worse than the performance of the S&P 500 Index. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.