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NEW YORK (TheStreet) -- Global Eagle Entertainment (ENT) has been upgraded by TheStreet Ratings from Sell to Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate GLOBAL EAGLE ENTERTAINMENT (ENT) 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 robust revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we find that the company's profit margins have been poor overall."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- ENT's very impressive revenue growth exceeded the industry average of 44.5%. Since the same quarter one year prior, revenues leaped by 56.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- ENT's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, ENT has a quick ratio of 1.61, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has increased to -$10.04 million or 20.67% when compared to the same quarter last year. Despite an increase in cash flow, GLOBAL EAGLE ENTERTAINMENT's cash flow growth rate is still lower than the industry average growth rate of 42.24%.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Internet Software & Services industry and the overall market, GLOBAL EAGLE ENTERTAINMENT's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for GLOBAL EAGLE ENTERTAINMENT is currently lower than what is desirable, coming in at 25.37%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 12.22% trails the industry average.
- You can view the full analysis from the report here: ENT Ratings Report
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