NEW YORK (TheStreet) -- Verizon (VZ) - Get Verizon Communications Inc. Report stock is increasing by 1.48% to $46.02 in late morning trading on Thursday, after its subsidiary AOL agreed to acquire Millennial Media (MM) for about $250 million.
Millennial Media stock is soaring by 29.1% to $1.73 on heavy trading volume.
Shareholders of Millennial Media, a mobile advertising marketplace, will receive $1.75 per share as part of the deal.
"AOL is well positioned as consumers spend more and more time on mobile devices, and as advertisers, agencies and publishers become more reliant on programmatic monetization tools," AOL President Bob Lord said in a statement.
"By joining AOL, we will be adding additional mobile expertise to AOL's growing technology assets," Millennial Media CEO Michael Barrett added.
Millennial Media will become an AOL subsidiary following the transaction, which is expected to close this fall.
Separately, TheStreet Ratings team rates VERIZON COMMUNICATIONS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate VERIZON COMMUNICATIONS INC (VZ) a BUY. This is driven by some important positives, 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 revenue growth, increase in net income, good cash flow from operations, expanding profit margins and growth in earnings per share. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- VZ's revenue growth has slightly outpaced the industry average of 4.9%. Since the same quarter one year prior, revenues slightly increased by 2.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- 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 0.4% when compared to the same quarter one year prior, going from $4,214.00 million to $4,231.00 million.
- Net operating cash flow has increased to $8,737.00 million or 13.98% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 3.45%.
- The gross profit margin for VERIZON COMMUNICATIONS INC is rather high; currently it is at 61.37%. Regardless of VZ's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, VZ's net profit margin of 13.12% compares favorably to the industry average.
- VERIZON COMMUNICATIONS INC's earnings per share improvement from the most recent quarter was slightly positive. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, VERIZON COMMUNICATIONS INC reported lower earnings of $2.51 versus $4.00 in the prior year. This year, the market expects an improvement in earnings ($3.96 versus $2.51).
- You can view the full analysis from the report here: VZ Ratings Report