NEW YORK (
) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and poor profit margins.
Highlights from the ratings report include:
- SSP 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. Along with this, the company maintains a quick ratio of 2.79, which clearly demonstrates the ability to cover short-term cash needs.
- Net operating cash flow has significantly increased by 88.66% to -$4.21 million when compared to the same quarter last year. In addition, EW SCRIPPS has also vastly surpassed the industry average cash flow growth rate of 31.63%.
- EW SCRIPPS reported significant earnings per share improvement 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 year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, EW SCRIPPS turned its bottom line around by earning $0.26 versus -$3.75 in the prior year. For the next year, the market is expecting a contraction of 151.9% in earnings (-$0.14 versus $0.26).
- In its most recent trading session, SSP has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Media industry. The net income has significantly decreased by 102.2% when compared to the same quarter one year ago, falling from $99.51 million to -$2.21 million.
The E. W. Scripps Company, together with its subsidiaries, operates as a diverse media company with interests in television stations, newspapers, and local news and information Web sites. The company has a P/E ratio of 28.3, above the average media industry P/E ratio of 24.6 and above the S&P 500 P/E ratio of 17.7. E.W. Scripps has a market cap of $425.9 million and is part of the
industry. Shares are down 30% year to date as of the close of trading on Tuesday.
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