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Why Lionbridge Technologies (LIOX) Is Up Today

NEW YORK (TheStreet) -- Lionbridge Technologies (LIOX) gained 9.2% to $7.25 Friday after the company announced it secured three new crowd-testing agreements.

The three crowd-testing agreements are expected to generate $3 million in revenue for the company. The agreements for crowd-based testing include: a multi-year program with a Chinese consumer technology company to gauge local consumer sentiment, a new engagement with a global consumer technology company to verify geo-location data, and a "domestic mobile terrain testing engagement" with a Fortune 100 U.S. auto insurance firm.

Lionbridge did not identify any new clients by name.

"Lionbridge's ability to deliver managed crowd testing anywhere, anytime, with native speakers in nearly any language, is a unique differentiator in the testing market," senior vide president of Lionbridge's Global Enterprise Solutions Martha Crow said in a press release.

Must read: 3 Stocks Under $10 Spiking on Big Volume

TheStreet Ratings team rates LIONBRIDGE TECHNOLOGIES INC as a "buy" with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate LIONBRIDGE TECHNOLOGIES INC (LIOX) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. 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, increase in net income, growth in earnings per share and solid stock price performance. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 20.6%. Since the same quarter one year prior, revenues rose by 12.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The current debt-to-equity ratio, 0.33, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, LIOX has a quick ratio of 1.70, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the IT Services industry. The net income increased by 99.4% when compared to the same quarter one year prior, rising from $3.27 million to $6.53 million.
  • LIONBRIDGE TECHNOLOGIES INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. We anticipate these figures will begin to experience more growth in the coming year. During the past fiscal year, LIONBRIDGE TECHNOLOGIES INC's EPS of $0.19 remained unchanged from the prior years' EPS of $0.19. This year, the market expects an improvement in earnings ($0.26 versus $0.19).
  • Powered by its strong earnings growth of 100.00% and other important driving factors, this stock has surged by 78.04% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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.
  • You can view the full analysis from the report here: LIOX Ratings Report

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