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) -- IntercontinentalExchange (NYSE: ICE) has been reiterated by TheStreet Ratings as a buy with a ratings score of A. The company's strengths can be seen in multiple areas, such as its expanding profit margins, solid stock price performance, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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- The gross profit margin for INTERCONTINENTALEXCHANGE INC is currently very high, coming in at 78.80%. Regardless of ICE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ICE's net profit margin of 38.48% significantly outperformed against the industry.
- Compared to its closing price of one year ago, ICE's share price has jumped by 37.05%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- INTERCONTINENTALEXCHANGE INC's earnings per share declined by 8.4% in the most recent quarter compared to 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, INTERCONTINENTALEXCHANGE INC increased its bottom line by earning $7.52 versus $6.91 in the prior year. This year, the market expects an improvement in earnings ($8.50 versus $7.52).
- ICE'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. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.05 is very weak and demonstrates a lack of ability to pay short-term obligations.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 4.3%. Since the same quarter one year prior, revenues slightly dropped by 3.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
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