Rating Change #4
PT Indosat TBK (IIT) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income, expanding profit margins, impressive record of earnings per share growth and solid stock price performance. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
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Highlights from the ratings report include:
- IIT's revenue growth has slightly outpaced the industry average of 4.9%. Since the same quarter one year prior, revenues rose by 12.3%. 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 Wireless Telecommunication Services industry. The net income increased by 471.8% when compared to the same quarter one year prior, rising from $32.23 million to $184.30 million.
- The gross profit margin for INDOSAT TBK is rather high; currently it is at 53.10%. Regardless of IIT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, IIT's net profit margin of 29.40% significantly outperformed against the industry.
- INDOSAT TBK reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. During the past fiscal year, INDOSAT TBK increased its bottom line by earning $1.03 versus $0.86 in the prior year.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
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