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 solid stock price performance, impressive record of earnings per share growth, revenue growth, largely solid financial position with reasonable debt levels by most measures and increase in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 19.6%. Since the same quarter one year prior, revenues rose by 13.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.81 is weak.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- DIRECTV has improved earnings per share by 27.3% 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 $2.48 versus $0.94 in the prior year. This year, the market expects an improvement in earnings ($3.38 versus $2.48).
- The net income growth from the same quarter one year ago has exceeded that of the Media industry average, but is less than that of the S&P 500. The net income increased by 7.7% when compared to the same quarter one year prior, going from $479.00 million to $516.00 million.
DIRECTV, Inc. provides digital television entertainment in the United States and Latin America. The company provides direct-to-home (DTH) digital television services, as well as multi-channel video programming distribution services in the United States. The company has a P/E ratio of 14, below the average media industry P/E ratio of 14.5 and below the S&P 500 P/E ratio of 17.7. DIRECTV has a market cap of $32.7 billion and is part of the
industry. Shares are up 12.2% year to date as of the close of trading on Friday.
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