JDA Software Group (NASDAQ: JDAS) is rated at BUY with a grade of A-. 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 good cash flow from operations, solid stock price performance, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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Highlights from the ratings report include:
- JDAS, with its decline in revenue, slightly underperformed the industry average of 3.0%. Since the same quarter one year prior, revenues slightly dropped by 5.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Despite currently having a low debt-to-equity ratio of 0.37, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that JDAS's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.47 is high and demonstrates strong liquidity.
- JDA SOFTWARE GROUP INC's earnings per share declined by 39.5% 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, JDA SOFTWARE GROUP INC increased its bottom line by earning $1.94 versus $0.42 in the prior year. This year, the market expects an improvement in earnings ($2.11 versus $1.94).
- Compared to its closing price of one year ago, JDAS's share price has jumped by 35.04%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
JDA Software Group, Inc., together with its subsidiaries, provides enterprise software solutions worldwide.You can view the full JDA Software Group Ratings Report or get investment ideas from our investment research center. This is just a list of 5 of 50 stocks! Download a list of all 50 of TheStreet Ratings Tech Picks for 2013 NOW! Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.