NEW YORK (
) has been upgraded by TheStreet Ratings from hold to buy. 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, compelling growth in net income, attractive valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 15.0%. Since the same quarter one year prior, revenues rose by 41.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- CHRM has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, CHRM has a quick ratio of 1.54, which demonstrates the ability of the company to cover short-term liquidity needs.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Media industry average. The net income increased by 23.6% when compared to the same quarter one year prior, going from $11.97 million to $14.79 million.
- 35.50% is the gross profit margin for CHARM COMMUNICATIONS INC which we consider to be strong. Regardless of CHRM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CHRM's net profit margin of 18.40% compares favorably to the industry average.
Charm Communications Inc. operates as an advertising agency in China. The company offers a range of advertising agency services from planning and managing the advertising campaigns to creating and placing the advertisements. The company has a P/E ratio of 8.9, above the average media industry P/E ratio of 4.5 and below the S&P 500 P/E ratio of 17.7. Charm has a market cap of $389.8 million and is part of the
industry. Shares are up 13.7% year to date as of the close of trading on Monday.
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-- Written by a member of TheStreet RatingsStaff