Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. Trade-Ideas LLC identified BroadSoft ( BSFT) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified BroadSoft as such a stock due to the following factors:
- BSFT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $15.2 million.
- BSFT has traded 226,103 shares today.
- BSFT is down 3.3% today.
- BSFT was up 5.4% yesterday.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in BSFT with the Ticky from Trade-Ideas. See the FREE profile for BSFT NOW at Trade-Ideas More details on BSFT: BroadSoft, Inc. provides software and services that enable mobile, fixed-line, and cable service providers to deliver hosted or cloud-based unified communications and other voice and multimedia services over Internet protocol (IP) based networks. BSFT has a PE ratio of 361.0. Currently there are 3 analysts that rate BroadSoft a buy, no analysts rate it a sell, and 7 rate it a hold. The average volume for BroadSoft has been 360,700 shares per day over the past 30 days. BroadSoft has a market cap of $1.0 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.43 and a short float of 16.3% with 7.23 days to cover. Shares are down 0.6% year to date as of the close of trading on Friday. STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more. TheStreetRatings.com Analysis: TheStreet Quant Ratings rates BroadSoft as a hold. 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 and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity. Highlights from the ratings report include:
- BSFT's revenue growth has slightly outpaced the industry average of 5.8%. Since the same quarter one year prior, revenues slightly increased by 8.6%. 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.
- Despite currently having a low debt-to-equity ratio of 0.49, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 2.88 is very high and demonstrates very strong liquidity.
- The gross profit margin for BROADSOFT INC is currently very high, coming in at 83.54%. Regardless of BSFT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BSFT's net profit margin of -6.85% significantly underperformed when compared to the industry average.
- Net operating cash flow has significantly decreased to $3.50 million or 70.08% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- In its most recent trading session, BSFT has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
- You can view the full BroadSoft Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.