NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust 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 find that the company's return on equity has been disappointing.
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Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 6.8%. Since the same quarter one year prior, revenues rose by 40.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- INOD has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 2.99, which clearly demonstrates the ability to cover short-term cash needs.
- 35.60% is the gross profit margin for INNODATA INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 9.20% trails the industry average.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the IT Services industry and the overall market on the basis of return on equity, INNODATA INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
Innodata Inc. engages in the provision of business process, technology, and consulting services, as well as products and solutions that help to create, manage, use, and distribute digital information. The company has a P/E ratio of 10.9, equal to the average internet industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Innodata has a market cap of $97.3 million and is part of the
industry. Shares are down 0.3% year to date as of the close of trading on Thursday.
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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.