NEW YORK (TheStreet) -- Shares of IHS (IHS) closed down by 5.72% to $105.34 on Monday afternoon, ahead of the release of the company's third quarter financial results, due out before the opening bell tomorrow.
The Englewood, CO-based data analytics company is expected to report earnings of $1.47 per share on revenue of $578.9 million for the most recent quarter.
The company reported earnings of $1.49 per share and revenue of $556 million in the year ago period.
Additionally, the company is reportedly preparing to submit an offer for software maker Solera Holdings (SLH) , according to Reuters.
Last month Solera agreed to a merger with vista Equity Partners for $6.5 billion including debt.
Separately, TheStreet Ratings team rates IHS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
We rate IHS INC (IHS) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- IHS's revenue growth has slightly outpaced the industry average of 4.7%. Since the same quarter one year prior, revenues slightly increased by 4.1%. 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.
- The gross profit margin for IHS INC is rather high; currently it is at 61.21%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 8.61% is above that of the industry average.
- The debt-to-equity ratio is somewhat low, currently at 0.98, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that IHS's debt-to-equity ratio is low, the quick ratio, which is currently 0.60, displays a potential problem in covering short-term cash needs.
- IHS INC's earnings per share declined by 8.6% 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, IHS INC increased its bottom line by earning $2.83 versus $1.97 in the prior year. This year, the market expects an improvement in earnings ($5.91 versus $2.83).
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Professional Services industry and the overall market, IHS INC's return on equity is below that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: IHS