Trade-Ideas: Rentrak (RENT) Is Today's

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.

Trade-Ideas LLC identified Rentrak ( RENT) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Rentrak as such a stock due to the following factors:

  • RENT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $29.8 million.
  • RENT has traded 50,815 shares today.
  • RENT is up 6.5% today.
  • RENT was down 5.2% yesterday.

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More details on RENT:

Rentrak Corporation operates as a media measurement and information company serving the entertainment, television, video, and advertising industries worldwide. Currently there are 5 analysts that rate Rentrak a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Rentrak has been 283,600 shares per day over the past 30 days. Rentrak has a market cap of $1.0 billion and is part of the services sector and diversified services industry. The stock has a beta of -0.06 and a short float of 19.9% with 5.29 days to cover. Shares are down 12.5% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Rentrak as a hold. 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 expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 4.4%. Since the same quarter one year prior, revenues rose by 37.7%. 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.
  • RENT 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. Along with this, the company maintains a quick ratio of 3.63, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for RENTRAK CORP is rather high; currently it is at 68.46%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -8.51% is in-line with the industry average.
  • Net operating cash flow has declined marginally to $4.70 million or 3.11% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • 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 568.7% when compared to the same quarter one year ago, falling from -$0.34 million to -$2.29 million.

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