Stock To Watch: Cumulus Media (CMLS) In Perilous Reversal

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.

Trade-Ideas LLC identified Cumulus Media ( CMLS) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Cumulus Media as such a stock due to the following factors:

  • CMLS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $12.5 million.
  • CMLS has traded 670,413 shares today.
  • CMLS is down 3.1% today.
  • CMLS was up 5.7% yesterday.

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More details on CMLS:

Cumulus Media Inc. owns and operates commercial radio station clusters in the United States. It sells local, regional, and national advertising for broadcast on its radio stations. CMLS has a PE ratio of 15.1. Currently there are 3 analysts that rate Cumulus Media a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Cumulus Media has been 1.8 million shares per day over the past 30 days. Cumulus Media has a market cap of $981.1 million and is part of the services sector and media industry. The stock has a beta of 1.82 and a short float of 5.5% with 3.38 days to cover. Shares are down 45.1% year-to-date as of the close of trading on Friday.

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

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Cumulus Media as a hold. Among the primary strengths of the company is its revenue growth. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and poor profit margins.

Highlights from the ratings report include:
  • CMLS's revenue growth has slightly outpaced the industry average of 11.7%. Since the same quarter one year prior, revenues rose by 13.3%. 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.
  • CUMULUS MEDIA INC's earnings per share declined by 45.5% in the most recent quarter compared to 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, CUMULUS MEDIA INC turned its bottom line around by earning $0.00 versus -$0.67 in the prior year. This year, the market expects an increase in earnings to $0.41 from $0.00.
  • 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 44.1% when compared to the same quarter one year ago, falling from $27.10 million to $15.14 million.
  • The gross profit margin for CUMULUS MEDIA INC is currently lower than what is desirable, coming in at 32.42%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 4.61% trails that of the industry average.
  • The share price of CUMULUS MEDIA INC has not done very well: it is down 11.30% 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. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.

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

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