NEW YORK ( TheStreet) -- Multiband Corporation (Nasdaq: MBND) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth and notable return on equity. However, as a counter to these strengths, we also find weaknesses including generally poor debt management and poor profit margins. Highlights from the ratings report include:
- The gross profit margin for MULTIBAND CORP is currently lower than what is desirable, coming in at 25.90%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -0.10% trails that of the industry average.
- The debt-to-equity ratio is very high at 2.04 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.39, which clearly demonstrates the inability to cover short-term cash needs.
- MULTIBAND CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, MULTIBAND CORP turned its bottom line around by earning $0.86 versus -$1.05 in the prior year. For the next year, the market is expecting a contraction of 64.5% in earnings ($0.31 versus $0.86).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Diversified Telecommunication Services industry. The net income increased by 90.5% when compared to the same quarter one year prior, rising from -$0.96 million to -$0.09 million.
- Powered by its strong earnings growth of 64.28% and other important driving factors, this stock has surged by 139.70% 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.