Shares of SeaChange fell 0.1% to close at $10.56 Thursday.
For the fourth quarter, the company announced earnings of 2 cents a share, exactly meeting analysts' expectations. Revenue remained didn't change from the year-ago quarter, with the software company reporting fourth-quarter revenue of $44.57 million. That beats the estimate of analysts surveyed by Thomson Reuters who expected revenue of $35.04 million.
"Fiscal 2014 was a transitional year for SeaChange," CEO Raghu Rau said in a press release. "We established our next generation Adrenalin multi-screen television platform and Reference Design Kit-based Nucleus video gateway software as leaders in the market, while managing the decline of our legacy products. Over the course of fiscal 2014, we continued to make significant progress with our strategic growth initiatives as demonstrated by our expansion into telcos with multi-screen deployments by two new service providers in Europe, upgrades of our legacy video-on-demand and advertising customers to Adrenalin and Infusion, and further design wins for Nucleus. Our next generation products accounted for two-thirds of total product revenue in the fourth quarter."
TheStreet Ratings team rates SEACHANGE INTERNATIONAL INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate SEACHANGE INTERNATIONAL INC (SEAC) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- SEACHANGE INTERNATIONAL INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, SEACHANGE INTERNATIONAL INC continued to lose money by earning -$0.08 versus -$0.11 in the prior year. This year, the market expects an improvement in earnings ($0.25 versus -$0.08).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Software industry. The net income increased by 557.9% when compared to the same quarter one year prior, rising from -$0.13 million to $0.58 million.
- The gross profit margin for SEACHANGE INTERNATIONAL INC is rather high; currently it is at 58.91%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, SEAC's net profit margin of 1.52% significantly trails the industry average.
- Net operating cash flow has significantly decreased to $0.64 million or 81.94% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- SEAC has underperformed the S&P 500 Index, declining 14.79% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
- You can view the full analysis from the report here: SEAC Ratings Report