- Despite its growing revenue, the company underperformed as compared with the industry average of 12.8%. Since the same quarter one year prior, revenues slightly increased by 4.8%. 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.
- DYNAMICS RESEARCH CORP's earnings per share declined by 46.1% 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, DYNAMICS RESEARCH CORP increased its bottom line by earning $1.22 versus $1.04 in the prior year. This year, the market expects an improvement in earnings ($1.26 versus $1.22).
- 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, DYNAMICS RESEARCH CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- 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 IT Services industry. The net income has significantly decreased by 47.8% when compared to the same quarter one year ago, falling from $2.75 million to $1.44 million.
NEW YORK ( TheStreet) -- Dynamics Research Corporation (Nasdaq: DRCO) 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, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins. Highlights from the ratings report include: