NEW YORK (TheStreet) -- Acacia Research (ACTG) fell 6.31% on the session Friday to $13.96, down 94 cents from its previous close of $14.90, after the company, which purchases patents and licenses, reported fourth-quarter earnings that came up short of analysts' expectations.
The company reported a loss of 22 cents a share, which was 37 cents off of the income of 15 cents a share expected by analysts polled by Thomson Reuters. Acacia also reported revenue of $15.07 million, which was well short of the consensus estimate of $25.29 million.
The stock had a volume of 4,597,081, nearly seven times its average of 668,923. It hit a high of $14.51 and a low of $13.25 for the day. The stock holds a one-year high of $32.59 and a one-year low of $12.23.
TheStreet Ratings team rates ACACIA RESEARCH CORP as a "sell" with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate ACACIA RESEARCH CORP (ACTG) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Professional Services industry. The net income has significantly decreased by 137.4% when compared to the same quarter one year ago, falling from -$6.62 million to -$15.71 million.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Professional Services industry and the overall market, ACACIA RESEARCH CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to -$22.92 million or 435.86% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 50.08%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 135.71% compared to the year-earlier quarter. 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.
- ACACIA RESEARCH CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, ACACIA RESEARCH CORP increased its bottom line by earning $1.28 versus $0.54 in the prior year. For the next year, the market is expecting a contraction of 33.6% in earnings ($0.85 versus $1.28).
- You can view the full analysis from the report here: ACTG Ratings Report