3 Stocks Reiterated As A Hold: NFLX, TSLA, PM

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) -- TheStreet Ratings team reiterated 3 stocks with a hold rating on Friday based on 32 different data factors including general market action, fundamental analysis and technical indicators. The in-depth analysis of these ratings decisions goes as follows:

Netflix Inc:

Netflix (Nasdaq: NFLX) has been reiterated by TheStreet Ratings as a hold with a ratings score of C+. According to TheStreet Ratings team: The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.

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Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 4.3%. Since the same quarter one year prior, revenues rose by 24.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 1620.00% and other important driving factors, this stock has surged by 110.75% over the past year, outperforming the rise in the S&P 500 Index during the same period. Although NFLX had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
  • NFLX's debt-to-equity ratio of 0.61 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.74 is weak.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Internet & Catalog Retail industry and the overall market, NETFLIX INC's return on equity is below that of both the industry average and the S&P 500.

Netflix, Inc. operates as an Internet television network, is engaged in the Internet delivery of TV shows and movies directly on TVs, computers, and mobile devices in the United States and internationally. Netflix has a market cap of $26.6 billion and is part of the services sector and media industry. Shares are up 19.1% year-to-date as of the close of trading on Thursday.

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Tesla Motors Inc:

Tesla Motors (Nasdaq: TSLA) has been reiterated by TheStreet Ratings as a hold with a ratings score of C-. According to TheStreet Ratings team: The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and poor profit margins.

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Highlights from the ratings report include:
  • This stock has managed to rise its share value by 94.72% over the past twelve months. 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.
  • TSLA's revenue growth trails the industry average of 21.8%. Since the same quarter one year prior, revenues rose by 10.4%. 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.
  • TESLA MOTORS INC's earnings have gone downhill when comparing its most recently reported quarter with the same quarter a year earlier. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, TESLA MOTORS INC continued to lose money by earning -$0.71 versus -$3.70 in the prior year. This year, the market expects an improvement in earnings ($1.21 versus -$0.71).
  • Net operating cash flow has declined marginally to $60.64 million or 5.36% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • 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 Automobiles industry. The net income has significantly decreased by 542.7% when compared to the same quarter one year ago, falling from $11.25 million to -$49.80 million.

Tesla Motors, Inc. designs, develops, manufactures, and sells electric vehicles and electric vehicle powertrain components. Tesla has a market cap of $27.7 billion and is part of the consumer goods sector and automotive industry. Shares are up 45.9% year-to-date as of the close of trading on Thursday.

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Philip Morris International Inc:

Philip Morris International (NYSE: PM) has been reiterated by TheStreet Ratings as a hold with a ratings score of C+. According to TheStreet Ratings team: The company's strengths can be seen in multiple areas, such as its expanding profit margins and increase in stock price during the past year. 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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Highlights from the ratings report include:
  • The gross profit margin for PHILIP MORRIS INTERNATIONAL is rather high; currently it is at 68.41%. Regardless of PM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PM's net profit margin of 27.10% compares favorably to the industry average.
  • PM, with its decline in revenue, underperformed when compared the industry average of 3.0%. Since the same quarter one year prior, revenues slightly dropped by 8.8%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • In its most recent trading session, PM has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Tobacco industry. The net income has decreased by 11.8% when compared to the same quarter one year ago, dropping from $2,125.00 million to $1,875.00 million.
  • Net operating cash flow has decreased to $715.00 million or 47.54% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

Philip Morris International Inc., through its subsidiaries, manufactures and sells cigarettes and other tobacco products. The company's portfolio of brands include Marlboro, Merit, Parliament, Virginia Slims, L&M, Chesterfield, Bond Street, Lark, Muratti, Next, Philip Morris, and Red & White. Philip Morris International has a market cap of $135.3 billion and is part of the consumer goods sector and tobacco industry. Shares are down 2.6% year-to-date as of the close of trading on Thursday.

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