NEW YORK (
) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.
Highlights from the ratings report include:
- SAAS's revenue growth has slightly outpaced the industry average of 3.9%. Since the same quarter one year prior, revenues slightly increased by 9.2%. 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.
- SAAS's debt-to-equity ratio is very low at 0.18 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, SAAS has a quick ratio of 2.40, which demonstrates the ability of the company to cover short-term liquidity needs.
- 47.70% is the gross profit margin for INCONTACT INC which we consider to be strong. Regardless of SAAS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SAAS's net profit margin of -14.30% significantly underperformed when compared to the industry average.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Diversified Telecommunication Services industry and the overall market, INCONTACT INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to -$1.38 million or 705.70% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
inContact, Inc. provides cloud computing contact center services and network connectivity in the United States. inContact has a market cap of $182.1 million and is part of the
industry. Shares are up 19.2% year to date as of the close of trading on Friday.
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