NEW YORK ( TheStreet) -- Spanish Broadcasting System Inc (Nasdaq: SBSA) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and revenue growth. However, as a counter to these strengths, we also find weaknesses including generally poor debt management, weak operating cash flow and a generally disappointing performance in the stock itself. Highlights from the ratings report include:
- SPANISH BROADCASTING SYS 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. During the past fiscal year, SPANISH BROADCASTING SYS INC turned its bottom line around by earning $0.70 versus -$3.30 in the prior year.
- 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 185.6% when compared to the same quarter one year prior, rising from $3.08 million to $8.79 million.
- Net operating cash flow has decreased to $7.67 million or 10.32% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- The debt-to-equity ratio is very high at 5.89 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 0.26, which clearly demonstrates the inability to cover short-term cash needs.