United States Cellular Corp Stock Downgraded (USM)

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) -- United States Cellular (NYSE: USM) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

  • 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.

Highlights from the ratings report include:
  • 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 Wireless Telecommunication Services industry. The net income has significantly decreased by 113.1% when compared to the same quarter one year ago, falling from $143.39 million to -$18.79 million.
  • 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 Wireless Telecommunication Services industry and the overall market, US CELLULAR CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $149.32 million or 33.62% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • The share price of US CELLULAR CORP has not done very well: it is down 15.85% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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.
  • US CELLULAR CORP 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. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, US CELLULAR CORP increased its bottom line by earning $1.65 versus $1.30 in the prior year. For the next year, the market is expecting a contraction of 164.8% in earnings (-$1.07 versus $1.65).

United States Cellular Corporation operates as a wireless telecommunications service provider in the United States. United States Cellular has a market cap of $1.72 billion and is part of the technology sector and telecommunications industry. Shares are down 19.6% year to date as of the close of trading on Wednesday.

You can view the full United States Cellular Ratings Report or get investment ideas from our investment research center.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

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

More from Markets

Lowe's Snags Ex-Home Depot Exec as CEO; ISPs Face Competitive Threat -- ICYMI

Lowe's Snags Ex-Home Depot Exec as CEO; ISPs Face Competitive Threat -- ICYMI

Dow Slips 178 Points; S&P 500 and Nasdaq Also Decline

Dow Slips 178 Points; S&P 500 and Nasdaq Also Decline

Legal Weed Sales in California Are Off to a Less Than Smokin' Start

Legal Weed Sales in California Are Off to a Less Than Smokin' Start

Owner of Moviepass Sees Stock Plummet

Owner of Moviepass Sees Stock Plummet

Ford, GM Gain as China Slashes Auto Import Tariffs

Ford, GM Gain as China Slashes Auto Import Tariffs