NEW YORK (TheStreet) -- Interactive Intelligence (ININ - Get Report) shares are down -20% to $39.98 in after-hours trading on Tuesday as the company announced its preliminary second quarter earnings results.
The company expects to earn between $78 million and $80 million during the second quarter, well below the $87 million that analysts expected for the quarter and below its own previous guidance of between $86 million and $88 million.
The decreased guidance is due to lower than expected product revenues.
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TheStreet Ratings team rates INTERACTIVE INTELLIGENCE GRP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate INTERACTIVE INTELLIGENCE GRP (ININ) 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 revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and feeble growth in the company's earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- ININ's revenue growth has slightly outpaced the industry average of 8.2%. Since the same quarter one year prior, revenues slightly increased by 8.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- ININ has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.20, which illustrates the ability to avoid short-term cash problems.
- The gross profit margin for INTERACTIVE INTELLIGENCE GRP is rather high; currently it is at 63.98%. Regardless of ININ's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ININ's net profit margin of -3.22% significantly underperformed when compared to the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Software industry. The net income has significantly decreased by 276.0% when compared to the same quarter one year ago, falling from $1.46 million to -$2.56 million.
- The share price of INTERACTIVE INTELLIGENCE GRP has not done very well: it is down 5.05% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
- You can view the full analysis from the report here: ININ Ratings Report