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Interactive Intelligence Group Inc Stock Downgraded (ININ)

NEW YORK ( TheStreet) -- Interactive Intelligence Group (Nasdaq: ININ) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its 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 a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 12.4%. Since the same quarter one year prior, revenues rose by 10.6%. 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.
  • ININ 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 the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.41, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for INTERACTIVE INTELLIGENCE GRP is currently very high, coming in at 70.70%. Regardless of ININ's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ININ's net profit margin of 0.40% is significantly lower than the same period one year prior.
  • Net operating cash flow has decreased to $4.42 million or 33.71% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 26.41%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 93.75% compared to the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
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Interactive Intelligence Group, Inc. provides software products and services for contact center automation, unified communications, business process automation, content management, and vertical applications. The company has a P/E ratio of 41.1, above the average computer software & services industry P/E ratio of 39.9 and above the S&P 500 P/E ratio of 17.7. Interactive Intelligence Group has a market cap of $565.9 million and is part of the technology sector and computer software & services industry. Shares are up 36.2% year to date as of the close of trading on Thursday.

You can view the full Interactive Intelligence Group Ratings Report or get investment ideas from our investment research center.
-- Written by a member of TheStreet Ratings Staff

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