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Why Cumulus Media (CMLS) Stock Is Up Today

Stocks in this article: CMLS

NEW YORK (TheStreet) -- Cumulus Media (CMLS) was gaining 5.8% to $4.49 Friday following news of an insider buy.

Chairman and CEO Dickey Lewis purchased 25,000 shares of the company at $4.29 a share Friday, according to an SEC filing. The purchase brings Lewis' total holdings to about 3.47 million shares.

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TheStreet Ratings team rates CUMULUS MEDIA INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate CUMULUS MEDIA INC (CMLS) 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. Among the primary strengths of the company is its revenue growth. At the same time, however, 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:

  • CMLS's revenue growth has slightly outpaced the industry average of 12.2%. Since the same quarter one year prior, revenues rose by 13.3%. 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.
  • CUMULUS MEDIA INC's earnings per share declined by 45.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CUMULUS MEDIA INC turned its bottom line around by earning $0.00 versus -$0.67 in the prior year. This year, the market expects an increase in earnings to $0.41 from $0.00.
  • 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 44.1% when compared to the same quarter one year ago, falling from $27.10 million to $15.14 million.
  • The gross profit margin for CUMULUS MEDIA INC is currently lower than what is desirable, coming in at 32.42%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 4.61% trails that of the industry average.
  • In its most recent trading session, CMLS has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
  • You can view the full analysis from the report here: CMLS Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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