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NEW YORK (

TheStreet

)

-- Exa

(Nasdaq:

EXA

) has been downgraded by TheStreet Ratings from hold to sell. Among the areas we feel are negative, one of the most important has been an overall disappointing return on equity.

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Highlights from the ratings report include:

  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Software industry and the overall market, EXA CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • EXA CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, EXA CORP swung to a loss, reporting -$0.05 versus $0.05 in the prior year. This year, the market expects an improvement in earnings ($0.01 versus -$0.05).
  • The gross profit margin for EXA CORP is currently very high, coming in at 74.39%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, EXA's net profit margin of 0.74% significantly trails the industry average.
  • Net operating cash flow has significantly increased by 175.65% to $4.00 million when compared to the same quarter last year. In addition, EXA CORP has also vastly surpassed the industry average cash flow growth rate of -5.69%.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Software industry. The net income increased by 133.5% when compared to the same quarter one year prior, rising from -$0.34 million to $0.11 million.

Exa Corporation develops, sells, and supports simulation software and services for vehicle manufacturers. It offers PowerFLOW and a suite of related software products for simulating complex fluid flow problems, including aerodynamics, thermal management, aeroacoustics, or wind noise. Exa has a market cap of $177.7 million and is part of the technology sector and computer software & services industry. Shares are up 1% year to date as of the close of trading on Friday.

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Exa Ratings Report

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