NEW YORK (TheStreet) -- NTELOS Holdings (NTLS) stock is spiking on news it extended its Strategic Network Alliance (SNA) with Sprint Corporation (S) through to 2022. Under the agreement, NTELOS will continue to serve as the exclusive network provider for Sprint in the SNA territory, covering around 2.1 million people in West Virginia and a western portion of Virginia.
NTELOS will also gain access to Sprint's 800MHz, 1.9 GHz and 2.5 GHz spectrum.
By midmorning, shares had popped 16.5% to $14.05.
TheStreet Ratings team rates NTELOS HOLDINGS CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate NTELOS HOLDINGS CORP (NTLS) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 3.0%. Since the same quarter one year prior, revenues slightly increased by 2.3%. 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 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 Wireless Telecommunication Services industry and the overall market, NTELOS HOLDINGS CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
- NTELOS HOLDINGS CORP 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. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, NTELOS HOLDINGS CORP increased its bottom line by earning $1.12 versus $0.87 in the prior year. For the next year, the market is expecting a contraction of 37.5% in earnings ($0.70 versus $1.12).
- The gross profit margin for NTELOS HOLDINGS CORP is currently lower than what is desirable, coming in at 25.59%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.05% significantly trails the industry average.
- The share price of NTELOS HOLDINGS CORP has not done very well: it is down 14.97% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
- You can view the full analysis from the report here: NTLS Ratings Report