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Why NII Holdings (NIHD) Is Up Today

NEW YORK (TheStreet) -- NII Holdings (NIHD) continued its rise from last week on Tuesday after the company announced that its PRIP, an advanced Push-to-Talk app, has been made available for iPhone users in the United States. The stock was rising 5.67% to $3.15 in midday trading.

On Friday, NII Holdings announced that it would offer the Apple  (AAPL) iPhone 5s and iPhone 5c on the Nextel Brazil network on Jan. 31. The Brazilian telecom's customers can pre-register for either smartphone on its Web site. Nextel Brazil will become the fifth carrier in the nation to offer the iPhone.

PRIP is built on Motorola Mobility's PTT technology and allows users to engage with other PRIP subscribers and Nextel users in real-time, instantaneous and unlimited communication through 3G, 4G or Wi-Fi. The app is available on the Apple App Store and on Google Play for $1.99 per month with the first month free.

The introduction of the PRIP iPhone app brings the service to 97% of smartphone users in the U.S.

"We are excited to expand PRIP to iOS, bringing true push-to-talk capabilities to more users in the U.S.," said Greg Santoro, executive vice president and chief strategy and marketing officer for NII Holdings in a company statement. "As our customer demands evolve and new devices enter the marketplace, it is important we continue to expand our offerings to meet their needs."

TheStreet Ratings team rates NII Holdings as a "sell" with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate NII HOLDINGS INC (NIHD) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, weak operating cash flow and generally high debt management risk."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • NII HOLDINGS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, NII HOLDINGS INC swung to a loss, reporting -$4.15 versus $1.31 in the prior year. For the next year, the market is expecting a contraction of 66.5% in earnings (-$6.91 versus -$4.15).
  • 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 263.9% when compared to the same quarter one year ago, falling from -$82.42 million to -$299.94 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Wireless Telecommunication Services industry and the overall market, NII HOLDINGS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$62.41 million or 156.91% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 62.15%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 372.22% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • You can view the full analysis from the report here: NIHD Ratings Report

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