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Why Global Cash Access (GCA) Stock Is Surging Today

NEW YORK (TheStreet) -- Global Cash Access  (GCA) surged Wednesday after the integrated casino cash solutions provider beat analysts' estimates in its first-quarter report.

The company reported earnings per share of 22 cents, up from 19 cents in the same period one year earlier. This edged the consensus estimate of 21 cents by a penny. Revenue increased 2.6% year over year to $150.6 million for the quarter, which was just shy of the consensus estimate of $150.79 million.

Global Cash Access also updated its EPS guidance for the full year 2014 to a range of 87 cents to 91 cents, which surpassed the estimate of 82 cents from analysts polled by Thomson Reuters.

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The stock was up 20.64% to $7.89 at 2:32 p.m. on Wednesday.

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Separately, TheStreet Ratings team rates GLOBAL CASH ACCESS HOLDINGS as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate GLOBAL CASH ACCESS HOLDINGS (GCA) a BUY. This is driven by several positive factors, 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, reasonable valuation levels, increase in net income and growth in earnings per share. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

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

  • The revenue growth came in higher than the industry average of 16.4%. Since the same quarter one year prior, revenues slightly increased by 3.2%. 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, 0.47, is low and is below the industry average, implying that there has been successful management of debt levels.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the IT Services industry average, but is less than that of the S&P 500. The net income increased by 29.7% when compared to the same quarter one year prior, rising from $4.40 million to $5.70 million.
  • GLOBAL CASH ACCESS HOLDINGS has improved earnings per share by 33.3% 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, GLOBAL CASH ACCESS HOLDINGS reported lower earnings of $0.36 versus $0.38 in the prior year. This year, the market expects an improvement in earnings ($0.84 versus $0.36).
  • You can view the full analysis from the report here: GCA Ratings Report

STOCKS TO BUY: TheStreet's Stocks Under $10 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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