New York Times Company Stock Upgraded (NYT)

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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Highlights from the ratings report include:
  • 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.

The New York Times Company operates as a multimedia news and information company worldwide. The company operates in two segments, The New York Times Media Group and the New England Media Group. New York Times has a market cap of $2.13 billion and is part of the services sector and media industry. Shares are down 9.1% year to date as of the close of trading on Monday.

You can view the full New York Times Ratings Report or get investment ideas from our investment research center.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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