Update (9:40 a.m.): Updated with Friday market open information.
NEW YORK (TheStreet) -- Wunderlich upgraded Scripps Network Interactive (SNI - Get Report) to "buy" from "hold" and set a $90 target price. The firm cited valuation, as the stock is down 12% year to date.
The stock was up 1.24% to $76.88 at 9:39 a.m. on Friday.
Separately, TheStreet Ratings team rates SCRIPPS NETWORKS INTERACTIVE as a "buy" with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate SCRIPPS NETWORKS INTERACTIVE (SNI) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. 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, good cash flow from operations, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- SNI's revenue growth has slightly outpaced the industry average of 3.9%. Since the same quarter one year prior, revenues slightly increased by 8.2%. 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.
- The debt-to-equity ratio is somewhat low, currently at 0.66, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with this, the company maintains a quick ratio of 4.69, which clearly demonstrates the ability to cover short-term cash needs.
- Net operating cash flow has slightly increased to $193.83 million or 7.03% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -11.75%.
- The gross profit margin for SCRIPPS NETWORKS INTERACTIVE is currently very high, coming in at 71.17%. Regardless of SNI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SNI's net profit margin of 16.58% compares favorably to the industry average.
- SCRIPPS NETWORKS INTERACTIVE 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. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, SCRIPPS NETWORKS INTERACTIVE reported lower earnings of $3.40 versus $4.46 in the prior year. This year, the market expects an improvement in earnings ($4.00 versus $3.40).
- You can view the full analysis from the report here: SNI Ratings Report