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 impressive record of earnings per share growth, revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
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Highlights from the ratings report include:
- EMC CORP/MA has improved earnings per share by 28.6% 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, EMC CORP/MA increased its bottom line by earning $1.10 versus $0.88 in the prior year. This year, the market expects an improvement in earnings ($1.74 versus $1.10).
- The revenue growth significantly trails the industry average of 59.2%. Since the same quarter one year prior, revenues rose by 10.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Although EMC's debt-to-equity ratio of 0.08 is very low, it is currently higher than that of the industry average. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.01, which illustrates the ability to avoid short-term cash problems.
- The gross profit margin for EMC CORP/MA is rather high; currently it is at 68.30%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, EMC's net profit margin of 11.50% significantly trails the industry average.
- Net operating cash flow has increased to $1,688.19 million or 48.76% when compared to the same quarter last year. Despite an increase in cash flow of 48.76%, EMC CORP/MA is still growing at a significantly lower rate than the industry average of 126.17%.
EMC Corporation develops, delivers, and supports the information and virtual infrastructure technologies and solutions. The company has a P/E ratio of 21.9, equal to the average computer hardware industry P/E ratioand above the S&P 500 P/E ratio of 17.7. EMC has a market cap of $53.46 billion and is part of the
industry. Shares are up 17.7% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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.