NEW YORK (
) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.
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Highlights from the ratings report include:
- VOCS's very impressive revenue growth exceeded the industry average of 35.6%. Since the same quarter one year prior, revenues leaped by 53.1%. 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.
- The gross profit margin for VOCUS INC is currently very high, coming in at 85.30%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -11.90% is in-line with the industry average.
- VOCS's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that VOCS's debt-to-equity ratio is low, the quick ratio, which is currently 0.52, displays a potential problem in covering short-term cash needs.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet Software & Services industry. The net income has significantly decreased by 587.3% when compared to the same quarter one year ago, falling from -$0.76 million to -$5.19 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Internet Software & Services industry and the overall market, VOCUS INC's return on equity significantly trails that of both the industry average and the S&P 500.
Vocus, Inc. provides cloud marketing software that enables businesses attract, engage, and retain customers in the United States, Europe, Asia, and Morocco. It offers a suite of software for social media marketing, search marketing, email marketing, and publicity. Vocus has a market cap of $347.8 million and is part of the
industry. Shares are down 18.9% year to date as of the close of trading on Thursday.
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-- Written by a member of TheStreet Ratings Staff
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.