Rating Change #6
LIN TV Corporation (TVL) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and feeble growth in the company's earnings per share.
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Highlights from the ratings report include:
- TVL's very impressive revenue growth greatly exceeded the industry average of 8.5%. Since the same quarter one year prior, revenues leaped by 75.9%. 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.
- Compared to its closing price of one year ago, TVL's share price has jumped by 163.70%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- The gross profit margin for LIN TV CORP is currently very high, coming in at 71.20%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -29.61% is in-line with the industry average.
- LIN TV CORP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, LIN TV CORP swung to a loss, reporting -$0.36 versus $0.88 in the prior year. This year, the market expects an improvement in earnings ($0.78 versus -$0.36).
- 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 Media industry. The net income has significantly decreased by 235.2% when compared to the same quarter one year ago, falling from $42.96 million to -$58.09 million.