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 (
-- Time Warner
) has been reiterated by TheStreet Ratings as a buy with a ratings score of A- . The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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Highlights from the ratings report include:
- Compared to its closing price of one year ago, TWX's share price has jumped by 46.66%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, TWX should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The debt-to-equity ratio is somewhat low, currently at 0.68, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.11, which illustrates the ability to avoid short-term cash problems.
- Net operating cash flow has significantly increased by 679.06% to $335.00 million when compared to the same quarter last year. In addition, TIME WARNER INC has also vastly surpassed the industry average cash flow growth rate of 14.80%.
- 45.10% is the gross profit margin for TIME WARNER INC which we consider to be strong. 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 6.40% trails the industry average.
Time Warner Inc. operates as a media and entertainment company in the United States and internationally. It operates in three segments: Networks, Film and TV Entertainment, and Publishing. The company has a P/E ratio of 17.6, equal to the average media industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Time Warner has a market cap of $42.69 billion and is part of the
industry. Shares are up 24.5% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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