NEW YORK (TheStreet) -- J.P. Morgan (JPM) upgraded Cardtronics (CATM - Get Report) to "overweight" from "neutral" and set a $45 price target. The firm said the company's Welch ATM acquisition creates bullish sentiment.
The stock closed at $36.21 on Tuesday.
Separately, TheStreet Ratings team rates CARDTRONICS INC as a "hold" with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:"We rate CARDTRONICS INC (CATM) 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 robust revenue growth, increase in net income and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, disappointing return on equity and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 13.6%. Since the same quarter one year prior, revenues rose by 23.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the IT Services industry average. The net income increased by 1.4% when compared to the same quarter one year prior, going from $9.43 million to $9.57 million.
- CARDTRONICS INC reported flat earnings per share in the most recent quarter. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, CARDTRONICS INC reported lower earnings of $0.51 versus $0.96 in the prior year. This year, the market expects an improvement in earnings ($2.27 versus $0.51).
- The gross profit margin for CARDTRONICS INC is currently lower than what is desirable, coming in at 32.03%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.90% significantly trails the industry average.
- Net operating cash flow has significantly decreased to $14.52 million or 64.91% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full analysis from the report here: CATM Ratings Report