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NEW YORK (TheStreet) -- RRsat Global Communications Network (RRST) has been downgraded by TheStreet Ratings from Buy to Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate RRSAT GLOBAL COMMUNICATIONS NETWORK LTD (RRST) 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 revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- RRST's revenue growth has slightly outpaced the industry average of 9.1%. Since the same quarter one year prior, revenues rose by 10.2%. 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.
- RRST has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, RRST has a quick ratio of 1.68, which demonstrates the ability of the company to cover short-term liquidity needs.
- RRSAT GLOBAL COMM NTWRK LTD 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 year. We anticipate that this should continue in the coming year. During the past fiscal year, RRSAT GLOBAL COMM NTWRK LTD reported lower earnings of $0.37 versus $0.48 in the prior year. For the next year, the market is expecting a contraction of 5.4% in earnings ($0.35 versus $0.37).
- 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 61.1% when compared to the same quarter one year ago, falling from $1.73 million to $0.68 million.
- You can view the full analysis from the report here: RRST Ratings Report