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 downgraded by TheStreet Ratings from buy to hold. 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 and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.
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Highlights from the ratings report include:
- SATS's revenue growth trails the industry average of 15.8%. Since the same quarter one year prior, revenues slightly increased by 4.0%. 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.
- SATS's debt-to-equity ratio of 0.78 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.91 is very high and demonstrates very strong liquidity.
- The gross profit margin for ECHOSTAR CORP is currently lower than what is desirable, coming in at 33.00%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.43% significantly trails the industry average.
- Net operating cash flow has decreased to $50.18 million or 36.64% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
EchoStar Corporation, together with its subsidiaries, engages in the design, development, and distribution of digital set-top boxes and related products. The company has a P/E ratio of 40.6, above the S&P 500 P/E ratio of 17.7. EchoStar has a market cap of $1.63 billion and is part of the technology sector and telecommunications industry. Shares are up 17.4% year to date as of the close of trading on Monday.
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-- Written by a member of TheStreet Ratings Staff
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