NEW YORK ( TheStreet) -- Cumulus Media (Nasdaq: CMLS) has been downgraded by TheStreet Ratings from hold to sell. Among the areas we feel are negative, one of the most important has been unimpressive growth in net income over time.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Media industry. The net income has significantly decreased by 89.1% when compared to the same quarter one year ago, falling from $12.30 million to $1.34 million.
  • CMLS, with its decline in revenue, underperformed when compared the industry average of 19.0%. Since the same quarter one year prior, revenues slightly dropped by 0.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • CUMULUS MEDIA INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, CUMULUS MEDIA INC turned its bottom line around by earning $0.68 versus -$3.14 in the prior year.
  • Looking at where the stock is today compared to one year ago, we find that it is higher, and it has outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • 42.60% is the gross profit margin for CUMULUS MEDIA 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 1.90% trails the industry average.

Cumulus Media Inc., a radio broadcasting company, engages in the acquisition, operation, and development of commercial radio stations in the United States. It owns and operates FM and AM radio station clusters that serve mid-sized markets. The company has a P/E ratio of 3.4, equal to the average media industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Cumulus Media has a market cap of $107.2 million and is part of the services sector and media industry. Shares are down 35.3% year to date as of the close of trading on Tuesday.

You can view the full Cumulus Media Ratings Report or get investment ideas from our investment research center.
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