Pervasive Software Inc. Stock Upgraded (PVSW)

NEW YORK ( TheStreet) -- Pervasive Software (Nasdaq: PVSW) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in net income, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • PVSW's revenue growth has slightly outpaced the industry average of 1.7%. Since the same quarter one year prior, revenues slightly increased by 1.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • PVSW 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 3.54, which clearly demonstrates the ability to cover short-term cash needs.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Software industry average. The net income increased by 19.9% when compared to the same quarter one year prior, going from $0.42 million to $0.51 million.
  • Net operating cash flow has increased to $2.27 million or 46.89% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 25.87%.
  • PERVASIVE SOFTWARE INC reported flat earnings per share in the most recent quarter. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, PERVASIVE SOFTWARE INC reported lower earnings of $0.18 versus $0.24 in the prior year. This year, the market expects an improvement in earnings ($0.19 versus $0.18).
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Pervasive Software, Inc. provides embeddable software and cloud-based services for data management, data integration, B2B exchange, and analytics. The company has a P/E ratio of 37.8, above the average computer software & services industry P/E ratio of 34.8 and above the S&P 500 P/E ratio of 17.7. Pervasive Software has a market cap of $88.8 million and is part of the technology sector and computer software & services industry. Shares are up 3.8% year to date as of the close of trading on Thursday.

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