NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and robust revenue growth. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.
Highlights from the ratings report include:
- ELECTRONICS FOR IMAGING INC reported significant earnings per share improvement 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. This trend suggests that the performance of the business is improving. During the past fiscal year, ELECTRONICS FOR IMAGING INC turned its bottom line around by earning $0.15 versus -$0.07 in the prior year. This year, the market expects an improvement in earnings ($1.10 versus $0.15).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Computers & Peripherals industry. The net income increased by 242.2% when compared to the same quarter one year prior, rising from -$2.54 million to $3.62 million.
- Net operating cash flow has significantly increased by 73.16% to $20.79 million when compared to the same quarter last year. Despite an increase in cash flow of 73.16%, ELECTRONICS FOR IMAGING INC is still growing at a significantly lower rate than the industry average of 130.80%.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. In comparison to the other companies in the Computers & Peripherals industry and the overall market, ELECTRONICS FOR IMAGING INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
Electronics For Imaging, Inc. provides color digital print controllers, format printers and inks, and print management solutions worldwide. The company's controller technologies transform digital copiers and printers into networked printing devices. The company has a P/E ratio of 19.2, below the average computer hardware industry P/E ratio of 19.5 and above the S&P 500 P/E ratio of 17.7. Electronics for Imaging has a market cap of $599.5 million and is part of the
industry. Shares are down 5.9% year to date as of the close of trading on Wednesday.
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