Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of B . The company's strengths can be seen in multiple areas, such as its solid stock price performance, robust revenue growth, expanding profit margins, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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Highlights from the ratings report include:
- Compared to its closing price of one year ago, AMT's share price has jumped by 28.35%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, AMT should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- Despite its growing revenue, the company underperformed as compared with the industry average of 18.7%. Since the same quarter one year prior, revenues rose by 16.8%. 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 gross profit margin for AMERICAN TOWER CORP is currently very high, coming in at 74.40%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, AMT's net profit margin of 6.90% significantly trails the industry average.
- Net operating cash flow has increased to $360.86 million or 30.97% when compared to the same quarter last year. Despite an increase in cash flow, AMERICAN TOWER CORP's cash flow growth rate is still lower than the industry average growth rate of 61.25%.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, AMERICAN TOWER CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
American Tower Corporation, a real estate investment trust, operates as a wireless and broadcast communications infrastructure company. It develops, owns, and operates communications sites. The company has a P/E ratio of 61.7, equal to the average telecommunications industry P/E ratio and above the S&P 500 P/E ratio of 17.7. American Tower has a market cap of $28.02 billion and is part of the
industry. Shares are up 16.8% year to date as of the close of trading on Tuesday.
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--Written by a member of TheStreet Ratings Staff.
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