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"We rate AIRMEDIA GROUP INC -ADS (AMCN) a SELL. This is driven by several weaknesses, 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 unimpressive growth in net income, poor profit margins and generally disappointing historical performance in the stock itself."
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 underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Media industry average. The net income has decreased by 10.0% when compared to the same quarter one year ago, dropping from -$4.95 million to -$5.44 million.
- The gross profit margin for AIRMEDIA GROUP INC -ADS is currently extremely low, coming in at 12.94%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -8.85% is significantly below that of the industry average.
- In its most recent trading session, AMCN 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. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Media industry and the overall market, AIRMEDIA GROUP INC -ADS's return on equity significantly trails that of both the industry average and the S&P 500.
- AMCN, with its decline in revenue, underperformed when compared the industry average of 9.1%. Since the same quarter one year prior, revenues slightly dropped by 3.0%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: AMCN Ratings Report