NEW YORK (
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, expanding profit margins, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 26.2%. Since the same quarter one year prior, revenues rose by 26.1%. 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.
- 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. When compared to other companies in the Internet Software & Services industry and the overall market, RIGHTNOW TECHNOLOGIES INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- The gross profit margin for RIGHTNOW TECHNOLOGIES INC is currently very high, coming in at 74.80%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, RNOW's net profit margin of 0.40% significantly trails the industry average.
- Net operating cash flow has significantly increased by 59.95% to $6.42 million when compared to the same quarter last year. Despite an increase in cash flow, RIGHTNOW TECHNOLOGIES INC's average is still marginally south of the industry average growth rate of 60.18%.
- Compared to its closing price of one year ago, RNOW's share price has jumped by 80.42%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
Rightnow Technologies, Inc. provides cloud-based customer experience software products and services. The company primarily offers RightNow CX, a customer experience suite for consumer-centric organizations to enable interactions across Web, social, and contact center touch points. The company has a P/E ratio of 42.2, above the average computer software & services industry P/E ratio of 41.7 and above the S&P 500 P/E ratio of 17.7. RightNow has a market cap of $1.1 billion and is part of the
industry. Shares are up 42.2% year to date as of the close of trading on Wednesday.
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