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) -- Telekomunikasi Indonesia (Persero) Tbk (NYSE: TLK) 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, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
- EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.
- The gross profit margin for TELEKOMUNIKASI INDONESIA is rather high; currently it is at 64.25%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 18.72% is above that of the industry average.
- The current debt-to-equity ratio, 0.35, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 1.00 is somewhat weak and could be cause for future problems.
- TELEKOMUNIKASI INDONESIA's earnings per share declined by 34.2% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, TELEKOMUNIKASI INDONESIA increased its bottom line by earning $2.68 versus $2.46 in the prior year.
- The revenue fell significantly faster than the industry average of 1.0%. Since the same quarter one year prior, revenues fell by 37.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Diversified Telecommunication Services industry and the overall market, TELEKOMUNIKASI INDONESIA's return on equity exceeds that of both the industry average and the S&P 500.