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) -- Boingo Wireless (Nasdaq: WIFI) has been upgraded by TheStreet Ratings from sell to hold. Among the primary strengths of the company is its revenue growth. At the same time, however, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.
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- The revenue growth came in higher than the industry average of 2.1%. Since the same quarter one year prior, revenues rose by 14.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- In its most recent trading session, WIFI has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- BOINGO WIRELESS INC 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. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, BOINGO WIRELESS INC swung to a loss, reporting -$0.11 versus $0.19 in the prior year. For the next year, the market is expecting a contraction of 190.9% in earnings (-$0.32 versus -$0.11).
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Wireless Telecommunication Services industry and the overall market, BOINGO WIRELESS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for BOINGO WIRELESS INC is currently lower than what is desirable, coming in at 25.62%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -20.59% is significantly below that of the industry average.