NEW YORK ( TheStreet) -- Loral Space & Communications (Nasdaq: LORL) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share. Highlights from the ratings report include:
- The gross profit margin for LORAL SPACE & COMMUNICATIONS is currently lower than what is desirable, coming in at 25.40%. Regardless of LORL's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, LORL's net profit margin of 34.90% significantly outperformed against the industry.
- LORL, with its decline in revenue, underperformed when compared the industry average of 18.3%. Since the same quarter one year prior, revenues slightly dropped by 6.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The share price of LORAL SPACE & COMMUNICATIONS has not done very well: it is down 6.41% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
- LORAL SPACE & COMMUNICATIONS 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. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, LORAL SPACE & COMMUNICATIONS reported lower earnings of $3.77 versus $15.47 in the prior year.
-- Written by a member of TheStreet RatingsStaff