NEW YORK ( TheStreet) -- Atlantic Tele-Network (Nasdaq: ATNI) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations, notable return on equity, growth in earnings per share and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • Even though the current debt-to-equity ratio is 1.02, it is still below the industry average, suggesting that this level of debt is acceptable within the Diversified Telecommunication Services industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.83 is weak.
  • ATLANTIC TELE-NETWORK INC has improved earnings per share by 11.5% 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 year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, ATLANTIC TELE-NETWORK INC increased its bottom line by earning $2.48 versus $2.32 in the prior year. For the next year, the market is expecting a contraction of 41.5% in earnings ($1.45 versus $2.48).
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Diversified Telecommunication Services industry and the overall market on the basis of return on equity, ATLANTIC TELE-NETWORK INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • Net operating cash flow has significantly increased by 108.10% to $20.99 million when compared to the same quarter last year. In addition, ATLANTIC TELE-NETWORK INC has also vastly surpassed the industry average cash flow growth rate of -4.08%.
  • ATNI's very impressive revenue growth greatly exceeded the industry average of 13.1%. Since the same quarter one year prior, revenues leaped by 243.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.

Atlantic Tele-Network, Inc. provides telecommunications services to rural, niche, and other under-served markets and geographies in the United States, Bermuda, and the Caribbean. The company has a P/E ratio of 14.8, equal to the average telecommunications industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Atlantic Tele-Network has a market cap of $572.5 million and is part of the technology sector and telecommunications industry. Shares are down 4.2% year to date as of the close of trading on Monday.

You can view the full Atlantic Tele-Network Ratings Report or get investment ideas from our investment research center.
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