Highlighted Post-Market Laggard: NeuStar (NSR)

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 NeuStar ( NSR) as a post-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified NeuStar as such a stock due to the following factors:

  • NSR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $55.3 million.
  • NSR is down 4.9% today from today's close.

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More details on NSR:

NeuStar, Inc. provides technology and directory services to customers pursuant to various private commercial and government contracts worldwide. The company operates in three segments: Carrier Services, Enterprise Services, and Information Services. NSR has a PE ratio of 14.1. Currently there is 1 analyst that rates NeuStar a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for NeuStar has been 1.2 million shares per day over the past 30 days. NeuStar has a market cap of $1.7 billion and is part of the technology sector and telecommunications industry. The stock has a beta of 1.65 and a short float of 20.9% with 6.68 days to cover. Shares are down 44.4% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates NeuStar as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, reasonable valuation levels, increase in net income and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 20.1%. Since the same quarter one year prior, revenues rose by 10.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • NEUSTAR INC has improved earnings per share by 5.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, NEUSTAR INC increased its bottom line by earning $2.47 versus $2.31 in the prior year. This year, the market expects an improvement in earnings ($3.73 versus $2.47).
  • The net income growth from the same quarter one year ago has exceeded that of the IT Services industry average, but is less than that of the S&P 500. The net income increased by 0.7% when compared to the same quarter one year prior, going from $37.78 million to $38.05 million.
  • Even though the current debt-to-equity ratio is 1.05, it is still below the industry average, suggesting that this level of debt is acceptable within the IT Services industry. Despite the fact that NSR's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.32 is high and demonstrates strong liquidity.

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