Update (9:36 a.m.): Updated with Tuesday market open information.
NEW YORK (TheStreet) -- Wells Fargo upgraded Acxiom (ACXM) to "outperform" from "market perform." The firm noted the stock has pulled back 21% and the company is seeing growing adoption for the AOS platform.
The stock was flat at 9:35 a.m. on Tuesday.
Separately, TheStreet Ratings team rates ACXIOM CORP as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate ACXIOM CORP (ACXM) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow."
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 0.0%. 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.
- The current debt-to-equity ratio, 0.47, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, ACXM has a quick ratio of 2.39, which demonstrates the ability of the company to cover short-term liquidity needs.
- 35.02% is the gross profit margin for ACXIOM CORP which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -10.54% is in-line with the industry average.
- 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 IT Services industry. The net income has significantly decreased by 320.8% when compared to the same quarter one year ago, falling from $13.24 million to -$29.22 million.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the IT Services industry and the overall market, ACXIOM CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: ACXM Ratings Report