Ebix Inc. Stock Upgraded (EBIX)

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) -- Ebix (Nasdaq: EBIX) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, increase in net income and attractive valuation levels. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

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Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 1.8%. Since the same quarter one year prior, revenues rose by 26.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • EBIX's debt-to-equity ratio is very low at 0.24 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.12, which illustrates the ability to avoid short-term cash problems.
  • EBIX INC has improved earnings per share by 12.2% 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 two years. We feel that this trend should continue. During the past fiscal year, EBIX INC increased its bottom line by earning $1.75 versus $1.53 in the prior year. This year, the market expects an improvement in earnings ($1.78 versus $1.75).
  • 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 9.3% when compared to the same quarter one year prior, going from $16.54 million to $18.07 million.
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Ebix, Inc. provides on-demand software and e-commerce solutions to the insurance industry. The company has a P/E ratio of nine, below the S&P 500 P/E ratio of 17.7. Ebix has a market cap of $592.8 million and is part of the technology sector and computer software & services industry. Shares are down 1.4% year to date as of the close of trading on Wednesday.

You can view the full Ebix Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

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.

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