Edgewater Technology Inc. Stock Upgraded (EDGW)

NEW YORK ( TheStreet) -- Edgewater Technology (Nasdaq: EDGW) 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, solid stock price performance, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 0.0%. Since the same quarter one year prior, revenues rose by 12.2%. 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.
  • EDGW's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, EDGW has a quick ratio of 1.92, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Compared to its closing price of one year ago, EDGW's share price has jumped by 27.16%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • EDGEWATER TECHNOLOGY INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, EDGEWATER TECHNOLOGY INC turned its bottom line around by earning $0.02 versus -$1.93 in the prior year. This year, the market expects an improvement in earnings ($0.26 versus $0.02).
  • 37.50% is the gross profit margin for EDGEWATER TECHNOLOGY INC which we consider to be strong. Regardless of EDGW's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, EDGW's net profit margin of -7.20% significantly underperformed when compared to the industry average.
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Edgewater Technology, Inc. operates as a consulting firm in North America. The company has a P/E ratio of 138.3, above the average computer software & services industry P/E ratio of 18.1 and above the S&P 500 P/E ratio of 17.7. Edgewater Technology has a market cap of $36.9 million and is part of the technology sector and computer software & services industry. Shares are up 49.3% year to date as of the close of trading on Thursday.

You can view the full Edgewater Technology Ratings Report or get investment ideas from our investment research center.
-- Written by a member of TheStreet RatingsStaff
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Edgewater Technology Inc. Stock Upgraded (EDGW)

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Edgewater Technology Inc. Stock Upgraded (EDGW)