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 increase in stock price during the past year, impressive record of earnings per share growth, revenue growth, good cash flow from operations and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
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Highlights from the ratings report include:
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- DIRECTV has improved earnings per share by 19.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, DIRECTV increased its bottom line by earning $3.48 versus $2.48 in the prior year. This year, the market expects an improvement in earnings ($4.23 versus $3.48).
- Despite its growing revenue, the company underperformed as compared with the industry average of 10.4%. Since the same quarter one year prior, revenues slightly increased by 9.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Net operating cash flow has increased to $1,261.00 million or 15.15% when compared to the same quarter last year. In addition, DIRECTV has also modestly surpassed the industry average cash flow growth rate of 14.80%.
- 49.80% is the gross profit margin for DIRECTV which we consider to be strong. Regardless of DTV's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, DTV's net profit margin of 9.80% compares favorably to the industry average.
DIRECTV provides digital television entertainment primarily in the United States and Latin America. The company engages in acquiring, promoting, selling, and distributing digital entertainment programming primarily via satellite to residential and commercial subscribers. The company has a P/E ratio of 13.5, equal to the average media industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Directv has a market cap of $32.87 billion and is part of the
industry. Shares are unchanged year to date as of the close of trading on Friday.
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--Written by a member of TheStreet Ratings Staff.
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