NEW YORK ( TheStreet) -- Knology (Nasdaq: KNOL) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its notable return on equity, expanding profit margins, impressive record of earnings per share growth, compelling growth in net income and revenue growth. We feel these strengths outweigh the fact that the company has had generally poor debt management on most measures that we evaluated. Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 17.2%. Since the same quarter one year prior, revenues rose by 16.3%. Growth in the company's revenue appears to have helped boost 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 Media industry. The net income increased by 85.5% when compared to the same quarter one year prior, rising from $7.64 million to $14.17 million.
- KNOLOGY INC 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. We feel that this trend should continue. During the past fiscal year, KNOLOGY INC continued to lose money by earning -$0.02 versus -$0.09 in the prior year. This year, the market expects an improvement in earnings ($1.22 versus -$0.02).
- The gross profit margin for KNOLOGY INC is rather high; currently it is at 68.20%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 10.80% is above that of the industry average.
- Compared to other companies in the Media industry and the overall market, KNOLOGY INC's return on equity significantly exceeds that of both the industry average and the S&P 500.