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"We rate SPOK HOLDINGS INC (SPOK) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels, increase in stock price during the past year and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth significantly trails the industry average of 61.1%. Since the same quarter one year prior, revenues slightly increased by 0.2%. 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.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- SPOK HOLDINGS INC's earnings per share declined by 19.2% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, SPOK HOLDINGS INC increased its bottom line by earning $1.25 versus $1.19 in the prior year.
- The gross profit margin for SPOK HOLDINGS INC is rather high; currently it is at 61.86%. Regardless of SPOK's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SPOK's net profit margin of 9.34% is significantly lower than the industry average.
- You can view the full analysis from the report here: SPOK Ratings Report