Allison Transmission Holdings (ALSN) Downgraded From Buy to Hold

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.  TheStreet Ratings quantitative algorithm evaluates over 4,300 stocks on a daily basis by 32 different data factors and assigns a unique buy, sell, or hold recommendation on each stock.  Click here to learn more.

NEW YORK (TheStreet) -- Allison Transmission Holdings  (ALSN) has been downgraded by TheStreet Ratings from Buy to Hold with a ratings score of C.  TheStreet Ratings Team has this to say about their recommendation:

"We rate ALLISON TRANSMISSION HLDGS (ALSN) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and notable return on equity. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and premium valuation."

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • ALSN's revenue growth has slightly outpaced the industry average of 4.0%. Since the same quarter one year prior, revenues slightly increased by 4.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has increased to $143.40 million or 10.56% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -24.46%.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Machinery industry and the overall market on the basis of return on equity, ALLISON TRANSMISSION HLDGS has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • The debt-to-equity ratio is very high at 2.06 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, ALSN maintains a poor quick ratio of 0.94, which illustrates the inability to avoid short-term cash problems.
  • You can view the full analysis from the report here: ALSN Ratings Report

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he and Stephanie Link think could be potentially HUGE winners. Click here to see the holdings for FREE.

More from Markets

REPLAY: Jim Cramer on How to Navigate the Stock Market Amid Tariff Worries

REPLAY: Jim Cramer on How to Navigate the Stock Market Amid Tariff Worries

Global Markets Hit Hard; AMC Entertainment Sells Stake in Ad Unit -- ICYMI

Global Markets Hit Hard; AMC Entertainment Sells Stake in Ad Unit -- ICYMI

CVS, Walgreens and Citigroup: Cramer's 'Off the Charts'

CVS, Walgreens and Citigroup: Cramer's 'Off the Charts'

Jim Cramer: 4 Stocks Could Get Throttled By a 'Knock Down Drag Out' With China

Jim Cramer: 4 Stocks Could Get Throttled By a 'Knock Down Drag Out' With China

General Electric Booted From Dow, Replaced by Walgreens

General Electric Booted From Dow, Replaced by Walgreens