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"We rate POLYCOM INC (PLCM) a BUY. This is driven by some important positives, 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, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- PLCM's revenue growth has slightly outpaced the industry average of 5.7%. Since the same quarter one year prior, revenues slightly increased by 0.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Although PLCM's debt-to-equity ratio of 0.24 is very low, it is currently higher than that of the industry average. To add to this, PLCM has a quick ratio of 1.90, which demonstrates the ability of the company to cover short-term liquidity needs.
- POLYCOM INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, POLYCOM INC turned its bottom line around by earning $0.30 versus -$0.11 in the prior year. This year, the market expects an improvement in earnings ($0.90 versus $0.30).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Communications Equipment industry. The net income increased by 1140.2% when compared to the same quarter one year prior, rising from -$1.97 million to $20.48 million.
- Net operating cash flow has significantly increased by 78.08% to $90.78 million when compared to the same quarter last year. In addition, POLYCOM INC has also vastly surpassed the industry average cash flow growth rate of -31.85%.
- You can view the full analysis from the report here: PLCM Ratings Report
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