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 revenue growth, attractive valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- MBND's revenue growth has slightly outpaced the industry average of 4.0%. Since the same quarter one year prior, revenues slightly increased by 9.9%. 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.
- The debt-to-equity ratio is somewhat low, currently at 0.82, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.75 is somewhat weak and could be cause for future problems.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. In comparison to the other companies in the Diversified Telecommunication Services industry and the overall market, MULTIBAND CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- The gross profit margin for MULTIBAND CORP is currently lower than what is desirable, coming in at 29.90%. It has decreased from the same quarter the previous year.
Multiband Corporation, together with its subsidiaries, provides voice, data, and video services to multi-dwelling unit and single family home customers in the United States. The company operates in two segments, Home Service Provider (HSP) and Multi-Dwelling Unit (MDU). The company has a P/E ratio of 3.2, below the average telecommunications industry P/E ratio of 3.4 and below the S&P 500 P/E ratio of 17.7. Multiband has a market cap of $72.3 million and is part of the
industry. Shares are up 2.8% year to date as of the close of trading on Tuesday.
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-- Written by a member of TheStreet Ratings Staff