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TheStreet Open House

Why InterCloud (ICLD) Stock Is Climbing Today

NEW YORK (TheStreet) -- Networks infrastructure provider InterCloud (ICLD) is moving higher on news it has been hired for two major design contracts for small cell deployment.

By early afternoon, shares had climbed 3.8% to $6.06.

The company said its first contract is with a national distributed-antenna and small cell hardwire vendor.

In a statement, InterCloud said it would "provide comprehensive professional small cell deployment and managed services to support their client's network in a major U.S. Theme Park."

The second contract is with an original equipment manufacturer to "provide communications design services for a major northeast metropolitan city's transit system."

The deals have a combined contract value of over $600,000.

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TheStreet Ratings team rates INTERCLOUD SYSTEMS INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate INTERCLOUD SYSTEMS INC (ICLD) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its poor profit margins and generally high debt management risk."

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

  • The gross profit margin for INTERCLOUD SYSTEMS INC is currently lower than what is desirable, coming in at 34.03%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 9.06% significantly trails the industry average.
  • Even though the current debt-to-equity ratio is 1.28, it is still below the industry average, suggesting that this level of debt is acceptable within the IT Services industry. Despite the fact that ICLD's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.57 is low and demonstrates weak liquidity.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the IT Services industry and the overall market, INTERCLOUD SYSTEMS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • This stock's share value has moved by only 33.31% over the past year. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • INTERCLOUD SYSTEMS INC has shown improvement in its earnings for its most recently reported quarter when compared with the same quarter a year earlier. The company has demonstrated a pattern of positive earnings per share growth over the past year. During the past fiscal year, INTERCLOUD SYSTEMS INC turned its bottom line around by earning $5.00 versus -$35.00 in the prior year.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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