SoundBite Communications Inc. Stock Upgraded (SDBT)

NEW YORK ( TheStreet) -- SoundBite Communications (Nasdaq: SDBT) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • This stock has managed to rise its share value by 9.09% over the past twelve months. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • SOUNDBITE COMMUNICATIONS INC has shown improvement in its earnings for its most recently reported quarter when compared with the same quarter a year earlier. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, SOUNDBITE COMMUNICATIONS INC continued to lose money by earning -$0.09 versus -$0.21 in the prior year. This year, the market expects an improvement in earnings ($0.02 versus -$0.09).
  • 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 450.7% when compared to the same quarter one year prior, rising from $0.07 million to $0.39 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 24.6%. Since the same quarter one year prior, revenues rose by 18.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • SDBT 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. Along with this, the company maintains a quick ratio of 7.72, which clearly demonstrates the ability to cover short-term cash needs.
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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 33.3% 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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