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 (

TheStreet

)

-- Hawaiian Telcom Holdco

(Nasdaq:

HCOM

) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income and notable return on equity. However, as a counter to these strengths, we find that the growth in the company's earnings per share has not been good.

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Highlights from the ratings report include:

  • Powered by its strong earnings growth of 750.00% and other important driving factors, this stock has surged by 35.20% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Diversified Telecommunication Services industry. The net income increased by 792.8% when compared to the same quarter one year prior, rising from $0.21 million to $1.85 million.
  • The gross profit margin for HAWAIIAN TELCOM HOLDCO INC is rather high; currently it is at 58.00%. Regardless of HCOM'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 1.92% trails the industry average.
  • Even though the current debt-to-equity ratio is 1.05, it is still below the industry average, suggesting that this level of debt is acceptable within the Diversified Telecommunication Services industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.31 is sturdy.
  • HAWAIIAN TELCOM HOLDCO INC 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, HAWAIIAN TELCOM HOLDCO INC increased its bottom line by earning $10.26 versus $2.43 in the prior year. For the next year, the market is expecting a contraction of 91.4% in earnings ($0.88 versus $10.26).

.

Hawaiian Telcom Holdco, Inc. provides communications services and products in Hawaii. The company operates through two segments, Wireline Services and Other. The company has a P/E ratio of 2.3, below the S&P 500 P/E ratio of 17.7. Hawaiian Telcom Holdco has a market cap of $253.2 million and is part of the technology sector and telecommunications industry. Shares are up 25.6% year to date as of the close of trading on Friday.

You can view the full

Hawaiian Telcom Holdco Ratings Report

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.

-- Written by a member of TheStreet Ratings Staff

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

.

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