Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link
NEW YORK (
) has been downgraded by TheStreet Ratings from hold to sell. The area that we feel has been the company's primary weakness has been its unimpressive growth in net income.
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Highlights from the ratings report include:
- The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Professional Services industry average. The net income increased by 10.6% when compared to the same quarter one year prior, going from $7.59 million to $8.40 million.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Professional Services industry and the overall market, RPX CORP's return on equity is below that of both the industry average and the S&P 500.
- The gross profit margin for RPX CORP is currently very high, coming in at 98.64%. It has increased significantly from the same period last year. Along with this, the net profit margin of 14.34% is above that of the industry average.
- Net operating cash flow has significantly increased by 83.10% to $33.15 million when compared to the same quarter last year. In addition, RPX CORP has also vastly surpassed the industry average cash flow growth rate of 3.84%.
- RPXC's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.56, which clearly demonstrates the ability to cover short-term cash needs.
RPX Corporation provides patent risk management solutions in the United States, Japan, and internationally. The company offers a subscription-based patent risk management solution that facilitates exchanges of value between owners and users of patents. The company has a P/E ratio of 20.1, above the S&P 500 P/E ratio of 17.7. RPX has a market cap of $864.8 million and is part of the services sector and diversified services industry. Shares are up 79.5% year to date as of the close of trading on Thursday.
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