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NEW YORK (TheStreet) -- Telecommunication Systems (TSYS) has been upgraded by TheStreet Ratings from Sell to Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate TELECOMMUNICATION SYS INC (TSYS) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 8.3%. Since the same quarter one year prior, revenues rose by 18.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 98.94% and other important driving factors, this stock has surged by 40.27% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- 35.72% is the gross profit margin for TELECOMMUNICATION SYS INC which we consider to be strong. Regardless of TSYS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TSYS's net profit margin of -0.46% significantly underperformed when compared to the industry average.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Software industry and the overall market, TELECOMMUNICATION SYS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The debt-to-equity ratio of 1.23 is relatively high when compared with the industry average, suggesting a need for better debt level management. Regardless of the company's weak debt-to-equity ratio, TSYS has managed to keep a strong quick ratio of 1.51, which demonstrates the ability to cover short-term cash needs.
- You can view the full analysis from the report here: TSYS Ratings Report