NEW YORK ( TheStreet) -- Turkcell Iletisim Hizmetleri AS (NYSE: TKC) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and attractive valuation levels. We feel these strengths outweigh the fact that the company has had sub par growth in net income. Highlights from the ratings report include:
- The current debt-to-equity ratio, 0.33, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, TKC has a quick ratio of 2.25, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for TURKCELL ILETISIM HIZMET is rather high; currently it is at 55.00%. Regardless of TKC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 21.30% trails the industry average.
- TKC, with its decline in revenue, underperformed when compared the industry average of 12.5%. Since the same quarter one year prior, revenues slightly dropped by 4.4%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- TURKCELL ILETISIM HIZMET's earnings per share declined by 16.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, TURKCELL ILETISIM HIZMET increased its bottom line by earning $1.32 versus $1.24 in the prior year. For the next year, the market is expecting a contraction of 37.9% in earnings ($0.82 versus $1.32).
-- Written by a member of TheStreet RatingsStaff