Skip to main content

NEW YORK (TheStreet) -- MDC Partners (MDCA)  stock is up 7.87% to $27.42 in afternoon trading Tuesday after Jefferies increased its price target to $30 from $25, while reiterating its "buy" rating. 

"Strong new business wins finished the year at $163 million with $57 million in the fourth quarter," analysts noted. The firm believes that these strong new business wins will drive the continued above average organic growth in 2015 for MDC Partners.  

MDC Partners is a provider of marketing communications services to customers worldwide. 

Exclusive Report:Jim Cramer's Best Stocks for 2015

Jefferies expects MDC to report 2014 fiscal year earnings of 11 cents per share, versus $2.20 per share in 2013.  However, the company is expected to post higher revenue of $1.27 billion versus the year ago revenue of $1.15 billion. 

Analysts lowered their 2015 and 2016 fiscal year earnings estimates to 72 cents and $1.03 per share from 89 cents and $1.29 per share, respectively. Jefferies expects MDC to post revenue of $1.32 billion and $1.44 billion in 2015 and 2016, respectively. 

Risks with this stock include a weakening in the overall macro environment, account losses, greater than account wins, cost inflation and merger and acquisition integration risk. 

Separately, TheStreet Ratings team rates MDC PARTNERS INC as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:

"We rate MDC PARTNERS INC (MDCA) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The gross profit margin for MDC PARTNERS INC is currently lower than what is desirable, coming in at 33.77%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -1.50% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to $8.97 million or 82.51% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • In its most recent trading session, MDCA has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • MDC PARTNERS INC 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, MDC PARTNERS INC reported poor results of -$2.93 versus -$1.71 in the prior year. This year, the market expects an improvement in earnings ($0.26 versus -$2.93).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Media industry average. The net income increased by 76.8% when compared to the same quarter one year prior, rising from -$21.20 million to -$4.92 million.
  • You can view the full analysis from the report here: MDCA Ratings Report