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) -- Shenandoah Telecommunications (Nasdaq: SHEN) 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, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
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- SHEN's revenue growth has slightly outpaced the industry average of 2.4%. Since the same quarter one year prior, revenues rose by 10.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 84.21% and other important driving factors, this stock has surged by 57.99% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- SHENANDOAH TELECOMMUN CO 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 year. We feel that this trend should continue. During the past fiscal year, SHENANDOAH TELECOMMUN CO increased its bottom line by earning $0.70 versus $0.57 in the prior year. This year, the market expects an improvement in earnings ($0.88 versus $0.70).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Wireless Telecommunication Services industry. The net income increased by 87.0% when compared to the same quarter one year prior, rising from $4.47 million to $8.35 million.
- The gross profit margin for SHENANDOAH TELECOMMUN CO is rather high; currently it is at 59.60%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 10.98% trails the industry average.
-- Written by a member of TheStreet Ratings Staff