Outdoors Channel Holdings Inc. Stock Upgraded (OUTD)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- Outdoors Channel Holdings (Nasdaq: OUTD) 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, largely solid financial position with reasonable debt levels by most measures, increase in net income, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

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Highlights from the ratings report include:
  • OUTD's revenue growth has slightly outpaced the industry average of 10.1%. Since the same quarter one year prior, revenues rose by 12.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • OUTD has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 5.85, which clearly demonstrates the ability to cover short-term cash needs.
  • OUTDOOR CHANNEL HLDGS 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, OUTDOOR CHANNEL HLDGS INC increased its bottom line by earning $0.08 versus $0.05 in the prior year. This year, the market expects an improvement in earnings ($0.13 versus $0.08).
  • 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 92.8% when compared to the same quarter one year prior, rising from -$0.86 million to -$0.06 million.
  • The gross profit margin for OUTDOOR CHANNEL HLDGS INC is rather high; currently it is at 55.50%. Regardless of OUTD'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 -0.40% trails the industry average.
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Outdoor Channel Holdings, Inc., through its subsidiaries, operates as an entertainment and media company in the United States. The company operates in three segments: The Outdoor Channel, Production Services, and Aerial Cameras. The company has a P/E ratio of 81.9, below the average media industry P/E ratio of 92.1 and above the S&P 500 P/E ratio of 17.7. Outdoors Channel has a market cap of $190.3 million and is part of the services sector and media industry. Shares are down 0.3% year to date as of the close of trading on Thursday.

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

-- Written by a member of TheStreet Ratings Staff

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

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