Rating Change #6
Telephone And Data Systems Inc (TDS) 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, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 11.0%. Since the same quarter one year prior, revenues slightly increased by 4.0%. 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.
- Despite currently having a low debt-to-equity ratio of 0.39, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that TDS's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.64 is high and demonstrates strong liquidity.
- The gross profit margin for TELEPHONE & DATA SYSTEMS INC is rather high; currently it is at 57.60%. Regardless of TDS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TDS's net profit margin of -0.50% significantly underperformed when compared to the industry average.
- Net operating cash flow has decreased to $282.45 million or 20.92% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, TELEPHONE & DATA SYSTEMS INC has marginally lower results.
- 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 Wireless Telecommunication Services industry. The net income has significantly decreased by 147.1% when compared to the same quarter one year ago, falling from $13.14 million to -$6.19 million.
Telephone and Data Systems, Inc., a diversified telecommunications service company, provides wireless and wireline telecommunications services in the United States. The company has a P/E ratio of 12.6, below the average telecommunications industry P/E ratio of 14 and below the S&P 500 P/E ratio of 17.7. Telephone and Data Systems has a market cap of $1.46 billion and is part of the technology sector and telecommunications industry. Shares are down 10% year to date as of the close of trading on Wednesday.You can view the full Telephone and Data Systems Ratings Report or get investment ideas from our investment research center.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV