Vantiv Inc Stock Downgraded (VNTV)

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) -- Vantiv (NYSE: VNTV) 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, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 11.9%. Since the same quarter one year prior, revenues rose by 17.2%. 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.
  • Net operating cash flow has increased to $171.76 million or 20.47% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -3.31%.
  • VANTIV INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. 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, VANTIV INC increased its bottom line by earning $0.88 versus $0.45 in the prior year. This year, the market expects an improvement in earnings ($1.89 versus $0.88).
  • The debt-to-equity ratio is very high at 4.34 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, VNTV has a quick ratio of 0.64, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the IT Services industry and the overall market, VANTIV INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.

If you liked this article you might like

Vantiv-Worldpay Deal an Inversion That Wasn't

The Amazon Effect Extends to Payments Industry With Vantiv-Worldpay Deal

North Korea, Disney and Netflix - 5 Things You Must Know Before the Market Opens

Investors Are Spooked by Rising Tensions With North Korea

Vantiv Agrees Terms for $12.1 Billion Takeover of Britain's Worldpay Group