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"We rate AIRMEDIA GROUP INC -ADS (AMCN) 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 solid stock price performance, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and poor profit margins."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to its closing price of one year ago, AMCN's share price has jumped by 41.25%, exceeding the performance of the broader market during that same time frame. 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.
- AMCN'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, AMCN has a quick ratio of 1.73, which demonstrates the ability of the company to cover short-term liquidity needs.
- AIRMEDIA GROUP INC -ADS's earnings per share declined by 25.0% 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, AIRMEDIA GROUP INC -ADS continued to lose money by earning -$0.18 versus -$0.53 in the prior year. This year, the market expects an improvement in earnings (-$0.09 versus -$0.18).
- The gross profit margin for AIRMEDIA GROUP INC -ADS is currently extremely low, coming in at 12.94%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -8.85% is significantly below that of the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Media industry average. The net income has decreased by 10.0% when compared to the same quarter one year ago, dropping from -$4.95 million to -$5.44 million.
- You can view the full analysis from the report here: AMCN Ratings Report