NEW YORK (
-- Saba Software
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- SABA SOFTWARE INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, SABA SOFTWARE INC turned its bottom line around by earning $0.09 versus -$0.08 in the prior year. This year, the market expects an improvement in earnings ($0.10 versus $0.09).
- Net operating cash flow has significantly increased by 51.69% to $4.03 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 24.74%.
- SABA's debt-to-equity ratio is very low at 0.03 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.11, which illustrates the ability to avoid short-term cash problems.
- Despite its growing revenue, the company underperformed as compared with the industry average of 22.3%. Since the same quarter one year prior, revenues rose by 13.8%. 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.
- Compared to its closing price of one year ago, SABA's share price has jumped by 47.20%, exceeding the performance of the broader market during that same time frame. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
Saba Software, Inc. provides a class of people systems that combine people learning, people performance, and people collaboration solutions. Saba Software has a market cap of $227.9 million and is part of the
industry. Shares are up 33% year to date as of the close of trading on Thursday.
You can view the full
or get investment ideas from our