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) -- Cellcom Israel (NYSE: CEL) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and a generally disappointing performance in the stock itself.
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- Net operating cash flow has increased to $108.29 million or 49.41% when compared to the same quarter last year. In addition, CELLCOM ISRAEL LTD has also vastly surpassed the industry average cash flow growth rate of -36.90%.
- The gross profit margin for CELLCOM ISRAEL LTD is rather high; currently it is at 57.00%. Regardless of CEL'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 7.90% trails the industry average.
- The revenue fell significantly faster than the industry average of 5.9%. Since the same quarter one year prior, revenues fell by 25.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 57.70%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 62.16% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Wireless Telecommunication Services industry. The net income has significantly decreased by 61.7% when compared to the same quarter one year ago, falling from $73.98 million to $28.32 million.
-- Written by a member of TheStreet Ratings Staff