NEW YORK (
-- GeoEye Inc
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and generally poor debt management.
Highlights from the ratings report include:
- GEOY's revenue growth has slightly outpaced the industry average of 2.2%. Since the same quarter one year prior, revenues slightly increased by 7.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has significantly increased by 222.65% to $47.95 million when compared to the same quarter last year. In addition, GEOEYE INC has also vastly surpassed the industry average cash flow growth rate of 12.06%.
- The gross profit margin for GEOEYE INC is rather high; currently it is at 64.00%. Regardless of GEOY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GEOY's net profit margin of 15.40% compares favorably to the industry average.
- 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. In comparison to the other companies in the Aerospace & Defense industry and the overall market, GEOEYE INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- Looking at the price performance of GEOY's shares over the past 12 months, there is not much good news to report: the stock is down 27.08%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
GeoEye, Inc., together with its subsidiaries, provides earth imagery and imagery information products, as well as image processing services to the United States and foreign government defense and intelligence organizations, domestic federal and foreign civil agencies, and commercial customers. The company has a P/E ratio of 21.9, equal to the average computer software & services industry P/E ratio and above the S&P 500 P/E ratio of 17.7. GeoEye has a market cap of $661.4 million and is part of the
industry. Shares are down 33.4% year to date as of the close of trading on Friday.
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