Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of B . The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, attractive valuation levels, good cash flow from operations and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.
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Highlights from the ratings report include:
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 33.00% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, CA should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- CA INC has improved earnings per share by 13.3% 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 two years. We feel that this trend should continue. During the past fiscal year, CA INC increased its bottom line by earning $1.91 versus $1.61 in the prior year. This year, the market expects an improvement in earnings ($2.48 versus $1.91).
- Net operating cash flow has increased to $183.00 million or 39.69% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 20.24%.
- The gross profit margin for CA INC is currently very high, coming in at 86.50%. Regardless of CA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CA's net profit margin of 21.00% significantly outperformed against the industry.
CA Technologies, together with its subsidiaries, provides enterprise information technology (IT) management software and solutions in the United States and internationally. The company operates in three segments: Mainframe Solutions, Enterprise Solutions, and Services. The company has a P/E ratio of 13.1, equal to the average computer software & services industry P/E ratio and below the S&P 500 P/E ratio of 17.7. CA has a market cap of $12.08 billion and is part of the
industry. Shares are up 28.1% year to date as of the close of trading on Tuesday.
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--Written by a member of TheStreet Ratings Staff.