Today's Dead Cat Bounce Stock: Realpage (RP)

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 Realpage ( RP) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Realpage as such a stock due to the following factors:

  • RP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $25.4 million.
  • RP has traded 75,456 shares today.
  • RP is up 4.1% today.
  • RP was down 22.6% yesterday.

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More details on RP:

RealPage, Inc. provides on demand software solutions for the rental housing industry in North America. RP has a PE ratio of 71.4. Currently there are 2 analysts that rate Realpage a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Realpage has been 337,200 shares per day over the past 30 days. Realpage has a market cap of $1.6 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.36 and a short float of 11% with 3.37 days to cover. Shares are down 11.4% year-to-date as of the close of trading on Monday.

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 Realpage as a hold. 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 and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:
  • RP's revenue growth has slightly outpaced the industry average of 10.8%. Since the same quarter one year prior, revenues rose by 20.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • RP has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.05, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for REALPAGE INC is rather high; currently it is at 64.98%. Regardless of RP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, RP's net profit margin of 12.90% is significantly lower than the industry average.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Software industry and the overall market, REALPAGE INC's return on equity is below that of both the industry average and the S&P 500.
  • In its most recent trading session, RP 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.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
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