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 reiterated by TheStreet Ratings as a buy with a ratings score of A- . The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 6.8%. Since the same quarter one year prior, revenues rose by 13.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- TDC's debt-to-equity ratio is very low at 0.16 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, TDC has a quick ratio of 1.84, which demonstrates the ability of the company to cover short-term liquidity needs.
- TERADATA CORP has improved earnings per share by 8.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, TERADATA CORP increased its bottom line by earning $2.06 versus $1.77 in the prior year. This year, the market expects an improvement in earnings ($2.80 versus $2.06).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the IT Services industry average. The net income increased by 8.7% when compared to the same quarter one year prior, going from $103.00 million to $112.00 million.
- The gross profit margin for TERADATA CORP is rather high; currently it is at 62.30%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 16.80% is above that of the industry average.
Teradata Corporation provides analytic data solutions worldwide. The company offers various data warehousing solutions that comprise software, hardware, and related business consulting and support services. The company has a P/E ratio of 33.1, above the average computer hardware industry P/E ratio of 32.9 and above the S&P 500 P/E ratio of 17.7. Teradata has a market cap of $12.55 billion and is part of the
industry. Shares are up 55.6% year to date as of the close of trading on Friday.
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--Written by a member of TheStreet Ratings Staff.