NEW YORK (TheStreet) -- Shares of Liberty Media Corp. (LMCA - Get Report) are up 2.06% to $49.95 in pre-market trade as the company began the process of spinning off its cable assets through a stock dividend to its shareholders to form a new listed company called Liberty Broadband, Reuters reports.
Liberty Broadband said the stock dividend would be worth up to $4.8 billion and Chairman John Malone would retain a voting interest of 47.3%, according to a regulatory filing.
TheStreet Ratings team rates LIBERTY MEDIA CORP as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate LIBERTY MEDIA CORP (LMCA) 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 robust revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 14.7%. Since the same quarter one year prior, revenues rose by 28.1%. 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 current debt-to-equity ratio, 0.33, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.18 is very weak and demonstrates a lack of ability to pay short-term obligations.
- 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 99.7% when compared to the same quarter one year ago, falling from $8,059.00 million to $22.00 million.
- Net operating cash flow has significantly decreased to $294.00 million or 80.89% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full analysis from the report here: LMCA Ratings Report