Encouraging comments from industry contacts highlight both recent innovations like DAR and DCR, and that these products are becoming increasingly important elements of major contract renewals, according to the analyst note.
"We believe Nielsen's improved revenue growth outlook should support multiple expansion," BMO Capital analysts said.
The combination of accelerating revenue growth, consistent margin expansion, and judicious returns of capital creates a compelling opportunity for value investors seeking consistent dividends, the firm added.
Nielsen, based in New York City, is an information and measurement company that is engaged in providing clients with an understanding of consumers and consumer behavior.
Shares of Nielsen are rising 3.81% to $48.23 on Monday afternoon trading.
Separately, TheStreet Ratings team rates NIELSEN HOLDINGS NV as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate NIELSEN HOLDINGS NV (NLSN) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its increase in net income, good cash flow from operations, expanding profit margins, growth in earnings per share and notable return on equity. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Professional Services industry. The net income increased by 54.0% when compared to the same quarter one year prior, rising from $74.00 million to $114.00 million.
- Net operating cash flow has increased to $251.00 million or 19.52% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 2.56%.
- The gross profit margin for NIELSEN HOLDINGS NV is rather high; currently it is at 58.43%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 7.31% trails the industry average.
- NIELSEN HOLDINGS NV reported significant earnings per share improvement 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, NIELSEN HOLDINGS NV reported lower earnings of $1.00 versus $1.13 in the prior year. This year, the market expects an improvement in earnings ($2.64 versus $1.00).
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 4.4%. Since the same quarter one year prior, revenues slightly dropped by 2.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- You can view the full analysis from the report here: NLSN Ratings Report