Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. NEW YORK ( TheStreet) -- New York Times Company (NYSE: NYT) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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- The gross profit margin for NEW YORK TIMES CO is rather high; currently it is at 62.94%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 14.78% is above that of the industry average.
- Compared to its closing price of one year ago, NYT's share price has jumped by 73.54%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp 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 other strengths this company displays justify these higher price levels.
- NEW YORK TIMES CO has experienced 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 of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, NEW YORK TIMES CO reported lower earnings of $0.36 versus $1.05 in the prior year. This year, the market expects an improvement in earnings ($0.40 versus $0.36).
- NYT, with its decline in revenue, underperformed when compared the industry average of 3.1%. Since the same quarter one year prior, revenues fell by 22.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- 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 Media industry. The net income has significantly decreased by 62.9% when compared to the same quarter one year ago, falling from $176.91 million to $65.63 million.