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 (
) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, weak operating cash flow and feeble growth in its earnings per share.
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Highlights from the ratings report include:
- 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 Media industry. The net income has significantly decreased by 262.9% when compared to the same quarter one year ago, falling from $1.10 million to -$1.79 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Media industry and the overall market on the basis of return on equity, SALEM COMMUNICATIONS CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
- The gross profit margin for SALEM COMMUNICATIONS CORP is currently lower than what is desirable, coming in at 31.20%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -3.10% is significantly below that of the industry average.
- Net operating cash flow has significantly decreased to $2.42 million or 59.49% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- SALEM COMMUNICATIONS CORP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, SALEM COMMUNICATIONS CORP increased its bottom line by earning $0.25 versus $0.08 in the prior year. For the next year, the market is expecting a contraction of 18.0% in earnings ($0.21 versus $0.25).
Salem Communications Corporation, a multi-media company, develops programs for audiences interested in Christian and conservative opinion content. The company has a P/E ratio of 71.1, below the average media industry P/E ratio of 98.2 and above the S&P 500 P/E ratio of 17.7. Salem has a market cap of $92.1 million and is part of the
industry. Shares are up 93.8% year to date as of the close of trading on Friday.
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-- Written by a member of TheStreet Ratings Staff