NEW YORK (TheStreet) -- Xoom Corp
(XOOM - Get Report) shares are climbing 21.2% to $23.88 in trading on Wednesday following the release of the company's first quarter 2014 results.
The online international money transfer company reported a year over year quarterly revenue increase of 48% to $35.9 million.
Revenue increased as the number of active customers rose 34% to 1.13 million over the same period in 2013.
Gross profit for the quarter was up 57% to $26.4 million from the same period in 2013.
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TheStreet Ratings team rates XOOM CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate XOOM CORP (XOOM) a SELL. This is driven by multiple 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. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- In its most recent trading session, XOOM has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.
- XOOM CORP 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, XOOM CORP turned its bottom line around by earning $0.17 versus -$0.05 in the prior year. For the next year, the market is expecting a contraction of 44.1% in earnings ($0.10 versus $0.17).
- Compared to other companies in the Internet Software & Services industry and the overall market, XOOM CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for XOOM CORP is currently very high, coming in at 70.81%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, XOOM's net profit margin of 3.58% significantly trails the industry average.
- Net operating cash flow has improved to $12.62 million from having none in the same quarter last year. Since the company had no net operating cash flow for the prior period, we cannot calculate a percent change in order to compare its growth rate with that of its industry average.
- You can view the full analysis from the report here: XOOM Ratings Report