TNS Inc. Stock Upgraded (TNS)

NEW YORK ( TheStreet) -- TNS (NYSE: TNS) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, notable return on equity and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • TNS's revenue growth has slightly outpaced the industry average of 0.2%. Since the same quarter one year prior, revenues slightly increased by 4.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • TNS 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, TNS INC increased its bottom line by earning $0.73 versus $0.34 in the prior year. This year, the market expects an improvement in earnings ($2.38 versus $0.73).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the IT Services industry. The net income increased by 542.6% when compared to the same quarter one year prior, rising from -$3.08 million to $13.62 million.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the IT Services industry and the overall market on the basis of return on equity, TNS INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • 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. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
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TNS, Inc. provides networking, data communications, and value added services to retailers, banks, and payment processors worldwide. It also offers secure data and voice network services to the financial services industry. The company has a P/E ratio of 255.6, below the average telecommunications industry P/E ratio of 895 and above the S&P 500 P/E ratio of 17.7. TNS has a market cap of $436.5 million and is part of the technology sector and telecommunications industry. Shares are up 0.2% year to date as of the close of trading on Wednesday.

You can view the full TNS Ratings Report or get investment ideas from our investment research center.
-- Written by a member of TheStreet RatingsStaff
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