To modernize trading on the 222-year-old New York Stock Exchange, ICE reportedly purchased Algo Technologies Ltd., which claims to have the industry's fastest matching engine, sources said, Bloomberg reports.
TheStreet Ratings team rates INTERCONTINENTALEXCHANGE GRP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate INTERCONTINENTALEXCHANGE GRP (ICE) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels, solid stock price performance, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- ICE's very impressive revenue growth greatly exceeded the industry average of 5.5%. Since the same quarter one year prior, revenues leaped by 89.4%. 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.
- Net operating cash flow has slightly increased to $173.17 million or 8.06% when compared to the same quarter last year. Despite an increase in cash flow, INTERCONTINENTALEXCHANGE GRP's cash flow growth rate is still lower than the industry average growth rate of 45.43%.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- INTERCONTINENTALEXCHANGE GRP 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. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, INTERCONTINENTALEXCHANGE GRP reported lower earnings of $4.03 versus $7.52 in the prior year. This year, the market expects an improvement in earnings ($11.03 versus $4.03).
- You can view the full analysis from the report here: ICE Ratings Report