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. aTheStreet 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. aClick here to learn more. NEW YORK (TheStreet) -- Avis Budget Groupa has been downgraded by TheStreet Ratings from Buy to Hold with a ratings score of C+. aTheStreet Ratings Team has this to say about their recommendation: "We rate AVIS BUDGET GROUP INC (CAR) 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, increase in net income and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and disappointing return on equity." Must Read: Warren Buffett's 25 Favorite Stocks 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: CAR's revenue growth has slightly outpaced the industry average of 8.9%. Since the same quarter one year prior, revenues slightly increased by 9.6%. Growth in the company's revenue appears to have helped boost the earnings per share. The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Road & Rail industry. The net income increased by 192.8% when compared to the same quarter one year prior, rising from -$28.00 million to $26.00 million. Powered by its strong earnings growth of 192.30% and other important driving factors, this stock has surged by 106.79% over the past year, outperforming the rise in the S&P 500 Index during the same period. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time. Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Road & Rail industry and the overall market on the basis of return on equity, AVIS BUDGET GROUP INC 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 21.34 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, CAR maintains a poor quick ratio of 0.75, which illustrates the inability to avoid short-term cash problems. You can view the full analysis from the report here: CAR Ratings Report STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
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