Directv Stock Downgraded (DTV)

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) -- Directv (Nasdaq: DTV) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share and increase in net income. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall.

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Highlights from the ratings report include:
  • Powered by its strong earnings growth of 34.74% and other important driving factors, this stock has surged by 32.86% 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.
  • DIRECTV has improved earnings per share by 34.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, DIRECTV increased its bottom line by earning $5.19 versus $4.61 in the prior year. This year, the market expects an improvement in earnings ($5.92 versus $5.19).
  • 48.46% is the gross profit margin for DIRECTV which we consider to be strong. Regardless of DTV's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 9.93% trails the industry average.
  • Net operating cash flow has remained constant at $1,474.00 million with no significant change when compared to the same quarter last year. Despite stable cash flow, DIRECTV's cash flow growth rate is still lower than the industry average growth rate of 13.42%.

DIRECTV provides digital television entertainment services in the United States and Latin America. The company acquires, promotes, sells, and distributes digital entertainment programming primarily through satellite to residential and commercial subscribers. Directv has a market cap of $42.19 billion and is part of the services sector and media industry. Shares are up 21.3% year to date as of the close of trading on Tuesday.

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

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

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