Story updated at 9:50 a.m. to reflect market activity.
heartland gained 1.3% to $40.33 in morning trading.
Robert Baird analysts said Heartland can deliver better earnings and deserves a higher multiple.
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Separately, TheStreet Ratings team rates HEARTLAND PAYMENT SYSTEMS as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate HEARTLAND PAYMENT SYSTEMS (HPY) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, growth in earnings per share, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 16.3%. Since the same quarter one year prior, revenues slightly increased by 4.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Net operating cash flow has significantly increased by 984.06% to $15.21 million when compared to the same quarter last year. In addition, HEARTLAND PAYMENT SYSTEMS has also vastly surpassed the industry average cash flow growth rate of -20.94%.
- HEARTLAND PAYMENT SYSTEMS's earnings per share improvement from the most recent quarter was slightly positive. 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, HEARTLAND PAYMENT SYSTEMS increased its bottom line by earning $1.98 versus $1.61 in the prior year. This year, the market expects an improvement in earnings ($2.39 versus $1.98).
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 27.16% over the past year, a rise that has exceeded that of the S&P 500 Index. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- The debt-to-equity ratio is somewhat low, currently at 0.73, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that HPY's debt-to-equity ratio is low, the quick ratio, which is currently 0.67, displays a potential problem in covering short-term cash needs.
- You can view the full analysis from the report here: HPY Ratings Report