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 largely solid financial position with reasonable debt levels by most measures, compelling growth in net income and reasonable valuation levels. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.
Highlights from the ratings report include:
- Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.00 is very high and demonstrates very strong liquidity.
- 39.70% is the gross profit margin for SYKES ENTERPRISES INC which we consider to be strong. Regardless of SYKE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 1.80% trails the industry average.
- 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 Commercial Services & Supplies industry and the overall market, SYKES ENTERPRISES INC's return on equity is below that of both the industry average and the S&P 500.
- The share price of SYKES ENTERPRISES INC has not done very well: it is down 18.28% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
Sykes Enterprises, Incorporated and its subsidiaries provide outsourced customer contact management solutions and services in the business process outsourcing arena primarily in the United States, Canada, Latin America, Australia, the Asia Pacific Rim, Europe, the Middle East, and Africa. The company has a P/E ratio of 13.2, below the average computer software & services industry P/E ratio of 31 and below the S&P 500 P/E ratio of 17.7. Sykes has a market cap of $786.8 million and is part of the
industry. Shares are up 0.3% year to date as of the close of trading on Tuesday.
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-- Written by a member of TheStreet Ratings Staff