NEW YORK (TheStreet) -- Sonus Networks (SONS) stock climbed over Tuesday's session after announcing that it had agreed to repurchase two million shares of common stock at $3.63 a share from Empire Capital Management. Sonus will pay for the shares using cash on hand.
Prior to the transaction, Empire held around 10.7% of shares outstanding. Following the transaction, the firm's stake will be just below 10%.
By market close, shares had added 3.3% to $3.75.
TheStreet Ratings team rates SONUS NETWORKS INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate SONUS NETWORKS INC (SONS) 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 revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company's return on equity has been disappointing."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 2.3%. Since the same quarter one year prior, revenues rose by 11.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Powered by its strong earnings growth of 80.00% and other important driving factors, this stock has surged by 43.56% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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.
- The gross profit margin for SONUS NETWORKS INC is currently very high, coming in at 71.51%. 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 -5.58% is in-line with the industry average.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Communications Equipment industry and the overall market, SONUS NETWORKS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: SONS Ratings Report