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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 notable return on equity, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.
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Highlights from the ratings report include:
- Compared to other companies in the Diversified Telecommunication Services industry and the overall market, MAGICJACK VOCALTEC LTD's return on equity significantly exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has significantly increased by 222.98% to $5.89 million when compared to the same quarter last year. In addition, MAGICJACK VOCALTEC LTD has also vastly surpassed the industry average cash flow growth rate of -16.16%.
- The gross profit margin for MAGICJACK VOCALTEC LTD is rather high; currently it is at 66.24%. Regardless of CALL'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 7.69% trails the industry average.
- The share price of MAGICJACK VOCALTEC LTD has not done very well: it is down 7.84% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- 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 Diversified Telecommunication Services industry. The net income has significantly decreased by 65.1% when compared to the same quarter one year ago, falling from $6.51 million to $2.27 million.
magicJack VocalTec Ltd., together with its subsidiaries, operates as a cloud-based communications company that provides voice-over-Internet-Protocol (VoIP) services in the United States. magicJack VocalTec has a market cap of $232.7 million and is part of the technology sector and telecommunications industry. Shares are up 3.2% year to date as of the close of trading on Wednesday.
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