NEW YORK (
-- Frontier Communications Corporation-Shs Ser
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations, expanding profit margins, increase in stock price during the past year and compelling growth in net income. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.
Highlights from the ratings report include:
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Diversified Telecommunication Services industry average. The net income increased by 28.5% when compared to the same quarter one year prior, rising from $42.57 million to $54.71 million.
- 45.70% is the gross profit margin for FRONTIER COMMUNICATIONS CORP which we consider to be strong. Regardless of FTR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 4.10% trails the industry average.
- Net operating cash flow has significantly increased by 317.46% to $514.11 million when compared to the same quarter last year. In addition, FRONTIER COMMUNICATIONS CORP has also vastly surpassed the industry average cash flow growth rate of -6.14%.
- FTR's very impressive revenue growth greatly exceeded the industry average of 12.2%. Since the same quarter one year prior, revenues leaped by 159.1%. 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.
Frontier Communications Corporation, a communications company, provides regulated and unregulated voice, data, and video services to residential, business, and wholesale customers in the United States. The company has a P/E ratio of 62.8, above the average telecommunications industry P/E ratio of 36.6 and above the S&P 500 P/E ratio of 17.7. Frontier Communications Corporation-Shs Ser has a market cap of $8.7 billion and is part of the
industry. Shares are down 8.7% year to date as of the close of trading on Friday.
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