The following ratings changes were generated on Monday, Nov. 17.
We've upgraded Cablevision (CVC) from sell to hold. Strengths include its revenue growth, impressive record of earnings per share growth and increase in net income. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.
Cablevision's revenue rose by 15.4% since the same quarter one year prior, outpacing the industry average of 9.8% growth and boosting earnings per share, which improved significantly in the most recent quarter compared with the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years, which we feel should continue, suggesting improving business performance. During the past fiscal year, Cablevision turned its bottom line around by earning 7 cents vs. -48 cents in the prior year. This year, the market expects an improvement to 67 cents.
The company's quick ratio of 0.33 is very low and demonstrates very weak liquidity. Cablevision's gross profit margin of 57.7% is rather high, but it has decreased from the same period last year. The net profit margin of 1.6% trails the industry average.Shares are down 45.92% on the year, underperforming the S&P 500. But don't assume that it's sharp decline in share price makes the stock cheap and attractive. Based on its current price in relation to its earnings, Cablevision is still more expensive than most of the other companies in its industry
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