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 revenue growth, increase in net income and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and weak operating cash flow.
Highlights from the ratings report include:
- Net operating cash flow has declined marginally to $48.43 million or 3.84% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- 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 Software industry and the overall market, PARAMETRIC TECHNOLOGY CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- PARAMETRIC TECHNOLOGY CORP has improved earnings per share by 44.4% 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, PARAMETRIC TECHNOLOGY CORP reported lower earnings of $0.21 versus $0.26 in the prior year. This year, the market expects an improvement in earnings ($1.23 versus $0.21).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Software industry. The net income increased by 44.9% when compared to the same quarter one year prior, rising from $10.72 million to $15.53 million.
- The revenue growth came in higher than the industry average of 1.4%. Since the same quarter one year prior, revenues rose by 20.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
Parametric Technology Corporation develops, markets, and supports product lifecycle management (PLM) software solutions and services that help companies design products, manage product information, and improve product development processes worldwide. The company has a P/E ratio of 62, below the average computer software & services industry P/E ratio of 66.3 and above the S&P 500 P/E ratio of 17.7. Parametric Technology has a market cap of $2.3 billion and is part of the
industry. Shares are down 17.2% year to date as of the close of trading on Monday.
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