Rating Change #8

HSN Inc ( HSNI) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, increase in net income, revenue growth and reasonable valuation levels. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • HSN INC has improved earnings per share by 26.2% 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, HSN INC increased its bottom line by earning $1.66 versus $1.26 in the prior year. This year, the market expects an improvement in earnings ($1.99 versus $1.66).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Internet & Catalog Retail industry average. The net income increased by 29.4% when compared to the same quarter one year prior, rising from $24.71 million to $31.97 million.
  • HSNI's revenue growth trails the industry average of 32.8%. Since the same quarter one year prior, revenues slightly increased by 8.3%. Growth in the company's revenue appears to have helped boost the earnings per share.

HSN, Inc. markets and sells a range of third party and private label merchandise primarily in the United States. The company has a P/E ratio of 19.3, above the average specialty retail industry P/E ratio of 19.1 and above the S&P 500 P/E ratio of 17.7. HSN has a market cap of $2 billion and is part of the services sector and specialty retail industry. Shares are up 13.5% year to date as of the close of trading on Monday.

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

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