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) -- Teradata Corporation (NYSE: TDC) has been reiterated by TheStreet Ratings as a buy with a ratings score of B. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
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- TDC's debt-to-equity ratio is very low at 0.15 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, TDC has a quick ratio of 1.74, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has increased to $243.00 million or 26.56% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -4.42%.
- TERADATA CORP's earnings per share declined by 34.0% 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, TERADATA CORP increased its bottom line by earning $2.44 versus $2.06 in the prior year. This year, the market expects an improvement in earnings ($3.05 versus $2.44).
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 13.1%. Since the same quarter one year prior, revenues slightly dropped by 4.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The gross profit margin for TERADATA CORP is rather high; currently it is at 57.80%. Regardless of TDC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 10.05% trails the industry average.
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