Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model
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 revenue growth, attractive valuation levels and increase in stock price during the past year. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 9.7%. Since the same quarter one year prior, revenues rose by 10.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- SYKES ENTERPRISES INC reported significant earnings per share improvement in the most recent quarter compared to 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, SYKES ENTERPRISES INC reported lower earnings of $0.93 versus $1.14 in the prior year. This year, the market expects an improvement in earnings ($1.21 versus $0.93).
- 38.50% 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, SYKE's net profit margin of 4.36% is significantly lower than the industry average.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the IT Services industry and the overall market, SYKES ENTERPRISES INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
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 11.7, below the S&P 500 P/E ratio of 17.7. Sykes has a market cap of $650.7 million and is part of the technology sector and computer software & services industry. Shares are down 2.4% year to date as of the close of trading on Monday.
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-- Written by a member of TheStreet Ratings Staff
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