Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model NEW YORK ( TheStreet) -- Sify Technologies (Nasdaq: SIFY) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income and expanding profit margins. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.
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- 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 35.9% when compared to the same quarter one year prior, rising from -$1.91 million to -$1.22 million.
- 43.10% is the gross profit margin for SIFY TECHNOLOGIES LTD -ADR which we consider to be strong. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -3.40% is in-line with the industry average.
- SIFY TECHNOLOGIES LTD -ADR reported flat earnings per share in the most recent quarter. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, SIFY TECHNOLOGIES LTD -ADR continued to lose money by earning -$0.06 versus -$0.18 in the prior year.
- The revenue fell significantly faster than the industry average of 36.2%. Since the same quarter one year prior, revenues fell by 30.0%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
- SIFY's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 43.54%, which is also worse than the performance of the S&P 500 Index. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
-- Written by a member of TheStreet Ratings Staff