SoundBite Communications Inc. Stock Upgraded (SDBT)

NEW YORK ( TheStreet) -- SoundBite Communications (Nasdaq: SDBT) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and revenue growth. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall.

Highlights from the ratings report include:
  • SOUNDBITE COMMUNICATIONS INC reported significant earnings per share improvement 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, SOUNDBITE COMMUNICATIONS INC continued to lose money by earning -$0.21 versus -$0.25 in the prior year. This year, the market expects an improvement in earnings (-$0.08 versus -$0.21).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet Software & Services industry. The net income increased by 83.4% when compared to the same quarter one year prior, rising from -$1.18 million to -$0.20 million.
  • The gross profit margin for SOUNDBITE COMMUNICATIONS INC is rather high; currently it is at 64.90%. 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 -1.80% is in-line with the industry average.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Internet Software & Services industry and the overall market, SOUNDBITE COMMUNICATIONS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $0.41 million or 46.92% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
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SoundBite Communications, Inc. and its subsidiaries provide cloud-based, multi-channel proactive customer communication services enabling organizations to design, execute, and measure communication campaigns for various marketing, customer care, payment, and collection processes. SoundBite has a market cap of $35.4 million and is part of the services sector and diversified services industry. Shares are up 22.7% year to date as of the close of trading on Tuesday.

You can view the full SoundBite Ratings Report or get investment ideas from our investment research center.
-- Written by a member of TheStreet RatingsStaff
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