NEW YORK (TheStreet) -- Shares of Astea International Inc. (ATEA) are up 8.25% to $2.23 after it obtained a two-year $3 million revolving credit line from Silicon Valley Bank (SIVB) - Get Free Report.
The service management software solutions firm said the credit line will fund significant projects planned in the coming years.
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TheStreet Ratings team rates ASTEA INTERNATIONAL INC as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:
"We rate ASTEA INTERNATIONAL INC (ATEA) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, generally high debt management risk, disappointing return on equity and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The debt-to-equity ratio is very high at 3.88 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.44, which clearly demonstrates the inability to cover short-term cash needs.
- 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 Software industry and the overall market, ASTEA INTERNATIONAL INC's return on equity significantly trails that of both the industry average and the S&P 500.
- ASTEA INTERNATIONAL INC's earnings per share declined by 19.4% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, ASTEA INTERNATIONAL INC reported poor results of -$0.92 versus -$0.19 in the prior year.
- 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 Software industry. The net income has decreased by 23.7% when compared to the same quarter one year ago, dropping from -$1.02 million to -$1.26 million.
- In its most recent trading session, ATEA has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- You can view the full analysis from the report here: ATEA Ratings Report