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TheStreet Open House

Why Globalstar (GSAT) Stock Is Up Today

NEW YORK (TheStreet) -- Globalstar (GSAT) was gaining 5.2% to $3.97 Thursday after Qualcomm (QCOM) disclosed that it purchased shares of the company.

Qualcomm purchased 4.15 million shares of Globalstar according to a recent 13F filing with the SEC. The disclosure helped drive up shares of Globalstar.

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TheStreet Ratings team rates GLOBALSTAR INC as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:

"We rate GLOBALSTAR INC (GSAT) a SELL. This is driven by some concerns, 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 deteriorating net income and feeble growth in its earnings per share."

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

  • 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 Diversified Telecommunication Services industry. The net income has significantly decreased by 243.5% when compared to the same quarter one year ago, falling from -$126.27 million to -$433.73 million.
  • GLOBALSTAR 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. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, GLOBALSTAR INC reported poor results of -$0.96 versus -$0.29 in the prior year. This year, the market expects an improvement in earnings (-$0.38 versus -$0.96).
  • Compared to its closing price of one year ago, GSAT's share price has jumped by 512.69%, exceeding the performance of the broader market during that same time frame. Regarding the future course of this stock, we feel that the risks involved in investing in GSAT do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
  • The revenue growth came in higher than the industry average of 1.2%. Since the same quarter one year prior, revenues rose by 21.0%. 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.
  • You can view the full analysis from the report here: GSAT 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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