Consolidated Communications Inc. Stock Downgraded (CNSL)
NEW YORK (TheStreet) -- Consolidated Communications (Nasdaq:CNSL) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its notable return on equity and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and generally poor debt management. Highlights from the ratings report include:
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Diversified Telecommunication Services industry and the overall market, CONSOLIDATED COMM HLDGS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The gross profit margin for CONSOLIDATED COMM HLDGS INC is rather high; currently it is at 61.60%. Regardless of CNSL's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 1.90% trails the industry average.
- CNSL, with its decline in revenue, slightly underperformed the industry average of 4.2%. Since the same quarter one year prior, revenues slightly dropped by 2.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- 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 Diversified Telecommunication Services industry. The net income has significantly decreased by 76.1% when compared to the same quarter one year ago, falling from $7.37 million to $1.76 million.
- The debt-to-equity ratio is very high at 25.63 and currently higher than the industry average, implying that there is very poor management of debt levels within the company.
-- Written by a member of TheStreet Ratings Staff
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