3. Sapient (SAPE) provides business and technology consulting services, offering multi-channel marketing and commerce solutions. Its stock has fallen 9.6% in 2011. It has dropped 12% in three months. Sapient's fourth-quarter adjusted earnings plummeted 78% to 11 cents, missing the consensus prediction by 2.7%. Its sales grew 27% to $233 million, narrowly missing consensus. The gross margin fell from 35% to 34% and the operating margin contracted from 10% to 9.5%. Sapient held $230 million of cash and no debt at quarter's end, for a quick ratio of 2.3.
Sapient's stock trades at a forward earnings multiple of 17 and a cash flow multiple of 17, slight premiums to technology services industry averages. But, its book value multiple of 3.4 and sales multiple of 1.8 reflect discounts of 59% and 44%. Of equity analysts covering Sapient, seven, or 64%, advise purchasing its stock, three recommend holding and one advocates selling the shares. Stifel Financial is most bullish, expecting a gain of 55% to $17. Goldman forecasts a rise of 37% to $15. Piper Jaffray, ranking Sapient "neutral", predicts that it will fall to $10.
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