NEW YORK (
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, robust revenue growth, increase in net income, reasonable valuation levels and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.
Highlights from the ratings report include:
- Net operating cash flow has significantly increased by 58.57% to $1.87 million when compared to the same quarter last year. Despite an increase in cash flow, COMMTOUCH SOFTWARE LTD's average is still marginally south of the industry average growth rate of 60.36%.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet Software & Services industry. The net income increased by 59.9% when compared to the same quarter one year prior, rising from $0.89 million to $1.42 million.
- The revenue growth came in higher than the industry average of 26.3%. Since the same quarter one year prior, revenues rose by 38.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.94 is very high and demonstrates very strong liquidity.
Commtouch Software Ltd., together with its subsidiaries, develops and provides messaging, antivirus, and Web security solutions primarily to original equipment manufacturer partners and enterprises. The company has a P/E ratio of 14.6, below the average internet industry P/E ratio of 18.4 and below the S&P 500 P/E ratio of 17.7. Commtouch Software has a market cap of $82.3 million and is part of the
industry. Shares are down 3.5% year to date as of the close of trading on Thursday.
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