NEW YORK (TheStreet) -- Shares of Cablevision Systems Corp (CVC) were trading in the red, down 0.38% to $23.65 in early market trading Friday, after analysts at Telsey Advisory Group lowered its rating on the cable service provider earlier this morning.
Telsey analysts downgraded Cablevision to "market perform" from "outperform" following the recent rally in share prices.
The firm noted that the stock gained 20% in recent weeks on takeover speculation. However, Telsey sees a takeover deal as "unlikely."
Bethpage, N.Y.-based Cablevision serves approximately 3.2 million video customers in and around the New York metropolitan area as well as other states nationwide.
Separately, TheStreet Ratings team rates CABLEVISION SYS CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate CABLEVISION SYS CORP (CVC) 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, revenue growth and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and feeble growth in the company's earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to its closing price of one year ago, CVC's share price has jumped by 45.01%, 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.
- Despite its growing revenue, the company underperformed as compared with the industry average of 3.8%. Since the same quarter one year prior, revenues slightly increased by 2.5%. 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.
- The gross profit margin for CABLEVISION SYS CORP is rather high; currently it is at 50.71%. Regardless of CVC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 2.76% trails the industry average.
- 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 50.3% when compared to the same quarter one year ago, falling from $89.76 million to $44.63 million.
- Net operating cash flow has decreased to $215.34 million or 24.04% 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.
- You can view the full analysis from the report here: CVC Ratings Report