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"We rate CHINA DIGITALTV HLDG CO -ADS (STV) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 32.23% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, STV should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- STV's revenue growth trails the industry average of 31.8%. Since the same quarter one year prior, revenues rose by 13.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- STV's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.61, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for CHINA DIGITALTV HLDG CO -ADS is currently very high, coming in at 79.41%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 36.74% significantly outperformed against the industry average.
- You can view the full analysis from the report here: STV Ratings Report