The company was upgraded to "outperform" from "market perform" at BMO Capital (BMO) due to the recent market pullback, subscription growth, customer bookings and enterprise momentum.
TheStreet Ratings team rates DEMANDWARE INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate DEMANDWARE INC (DWRE) a SELL. This is driven by a few notable 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 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 Internet Software & Services industry. The net income has significantly decreased by 44.0% when compared to the same quarter one year ago, falling from $3.22 million to $1.80 million.
- DEMANDWARE INC's earnings per share declined by 50.0% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, DEMANDWARE INC reported poor results of -$0.70 versus -$0.29 in the prior year. This year, the market expects an improvement in earnings (-$0.07 versus -$0.70).
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Internet Software & Services industry and the overall market, DEMANDWARE INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for DEMANDWARE INC is currently very high, coming in at 80.72%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, DWRE's net profit margin of 5.07% significantly trails the industry average.
- Net operating cash flow has significantly increased by 158.51% to $0.38 million when compared to the same quarter last year. In addition, DEMANDWARE INC has also vastly surpassed the industry average cash flow growth rate of 11.60%.
- You can view the full analysis from the report here: DWRE Ratings Report