NEW YORK (
-- TradeStation Group Incorporated
) has been upgraded by TheStreet Ratings from hold to buy. 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, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.
Highlights from the ratings report include:
- TRADESTATION GROUP 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. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, TRADESTATION GROUP INC reported lower earnings of $0.29 versus $0.38 in the prior year. For the next year, the market is expecting a contraction of 48.3% in earnings ($0.15 versus $0.29).
- Compared to its closing price of one year ago, TRAD's share price has jumped by 28.41%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- Net operating cash flow has slightly increased to $21.45 million or 3.86% when compared to the same quarter last year. In addition, TRADESTATION GROUP INC has also vastly surpassed the industry average cash flow growth rate of -116.26%.
- TRAD has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign.
- TRAD's revenue growth has slightly outpaced the industry average of 2.9%. Since the same quarter one year prior, revenues slightly increased by 0.2%. 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.
TradeStation Group, Inc. operates as an online broker-dealer, an introducing broker, a futures commission merchant, and a trading technology company. The company has a P/E ratio of 38.8, equal to the average financial services industry P/E ratio and above the S&P 500 P/E ratio of 17.7. TradeStation Group has a market cap of $389.7 million and is part of the
industry. Shares are up 44.4% year to date as of the close of trading on Thursday.
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