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
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 solid stock price performance, impressive record of earnings per share growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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Highlights from the ratings report include:
- Powered by its strong earnings growth of 38.02% and other important driving factors, this stock has surged by 33.02% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- COMPUTER SCIENCES CORP has improved earnings per share by 38.0% 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 year. We feel that this trend should continue. During the past fiscal year, COMPUTER SCIENCES CORP turned its bottom line around by earning $3.08 versus -$28.31 in the prior year. This year, the market expects an improvement in earnings ($3.85 versus $3.08).
- The debt-to-equity ratio is somewhat low, currently at 0.76, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.48, which illustrates the ability to avoid short-term cash problems.
- Net operating cash flow has increased to $529.00 million or 28.08% when compared to the same quarter last year. In addition, COMPUTER SCIENCES CORP has also modestly surpassed the industry average cash flow growth rate of 20.10%.
Computer Sciences Corporation provides information technology (IT) and professional services and solutions in North America, Europe, Asia, and Australia. Computer Sciences has a market cap of $9.24 billion and is part of the technology sector and computer software & services industry. Shares are up 13.5% year to date as of the close of trading on Wednesday.
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