NEW YORK (
) has been upgraded by TheStreet Ratings from hold to buy. 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 largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
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Highlights from the ratings report include:
- SHEN's revenue growth has slightly outpaced the industry average of 5.8%. Since the same quarter one year prior, revenues rose by 13.9%. 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 significantly exceeded that of the S&P 500 and the Wireless Telecommunication Services industry. The net income increased by 47.5% when compared to the same quarter one year prior, rising from $3.03 million to $4.47 million.
- Net operating cash flow has increased to $22.45 million or 25.06% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -24.08%.
- The gross profit margin for SHENANDOAH TELECOMMUN CO is rather high; currently it is at 57.80%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 6.50% trails the industry average.
- SHEN's debt-to-equity ratio of 0.87 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.81 is weak.
Shenandoah Telecommunications Company, a diversified telecommunications company, provides regulated and unregulated telecommunications services to end-user customers and other communications providers in the southeastern United States. The company has a P/E ratio of 19.7, below the average telecommunications industry P/E ratio of 20 and above the S&P 500 P/E ratio of 17.7. Shenandoah Telecommunications has a market cap of $295.7 million and is part of the
industry. Shares are up 20.1% year to date as of the close of trading on Wednesday.
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-- Written by a member of TheStreet Ratings Staff
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.