Why AirMedia Group (AMCN) Is Down Today

NEW YORK (TheStreet) -- AirMedia Group  (AMCN) continued its plunge on Friday as the company, which specializes in outdoor advertising, continued to suffer from its annual earnings report released earlier in the week.

The company reported a 5% decline for the year ended in December. AirMedia reported sales of $272.3 million, which was short of analysts' estimates by $360,000, according to surveys by Thomson Reuters. Adjusted net loss was 14 cents a share, which was wider than analysts's expectations of 13 cents a share.

The stock was down 11.68% to $2.15 at 2:32 p.m. on Friday.

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TheStreet Ratings team rates AIRMEDIA GROUP INC -ADS as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate AIRMEDIA GROUP INC -ADS (AMCN) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and poor profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Compared to its closing price of one year ago, AMCN's share price has jumped by 33.33%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • AMCN 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. To add to this, AMCN has a quick ratio of 1.98, which demonstrates the ability of the company to cover short-term liquidity needs.
  • AIRMEDIA GROUP INC -ADS 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. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, AIRMEDIA GROUP INC -ADS continued to lose money by earning -$0.18 versus -$0.53 in the prior year. This year, the market expects an improvement in earnings (-$0.01 versus -$0.18).
  • The gross profit margin for AIRMEDIA GROUP INC -ADS is rather low; currently it is at 15.88%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.88% significantly trails the industry average.
  • 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 56.5% when compared to the same quarter one year ago, falling from $3.35 million to $1.46 million.
  • You can view the full analysis from the report here: AMCN Ratings Report

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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.

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