NEW YORK (TheStreet) -- Shares of Inteliquent (IQNT) were gaining 20.1% to $21.43 on heavy trading volume Tuesday after the wireless communications company announced a new three-year agreement with T-Mobile (TMUS) - Get Report.

Under the new agreement Inteliquent will be the sole provider of voice interconnection services for all calls between T-Mobile and "nearly all other voice providers" in the U.S. The agreement's also includes Inteliquent's "Infrastructure as a Solution" offering which allows a customer to remove its division multiplexing interconnection from its network and use IP/SIP interconnection for voice services.

"We are thrilled to enter into this new agreement with T-Mobile" Inteliquent CTO John Bullock said in a statement. "Historically, we have been the leading provider of connectivity between wireless and other competitive carriers but not from those carriers to the incumbent local exchange carriers. Going forward, our Infrastructure as a Solution offering allows us to serve the enormous amount of traffic that is originated and terminated to legacy landline networks from wireless and other competitive carriers."

About 1.9 million shares of Inteliquent were traded by 3:36 p.m. Tuesday, well above the company's average trading volume of about 209,000 shares a day.

TheStreet Ratings team rates INTELIQUENT INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate INTELIQUENT INC (IQNT) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and growth in earnings per share. We feel its strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 67.94% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, IQNT should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Diversified Telecommunication Services industry average. The net income increased by 5.8% when compared to the same quarter one year prior, going from $9.45 million to $10.00 million.
  • IQNT 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 9.27, which clearly demonstrates the ability to cover short-term cash needs.
  • 45.76% is the gross profit margin for INTELIQUENT INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 18.90% is above that of the industry average.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 5.3%. Since the same quarter one year prior, revenues slightly dropped by 3.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • You can view the full analysis from the report here: IQNT Ratings Report