NEW YORK (TheStreet) -- Bankrate (RATE) stock has been upgraded to "outperform" from "sector perform" with a $21 price target, RBC Capital said Thursday. The firm said the revision was a valuation call as the stock is down 30% from recent highs.
Separately, TheStreet Ratings team rates BANKRATE INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate BANKRATE INC (RATE) 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, solid stock price performance and increase in net income. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- RATE's revenue growth has slightly outpaced the industry average of 21.3%. Since the same quarter one year prior, revenues rose by 25.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
- BANKRATE INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, BANKRATE INC swung to a loss, reporting -$0.11 versus $0.29 in the prior year. This year, the market expects an improvement in earnings ($0.69 versus -$0.11).
- Net operating cash flow has significantly decreased to $5.44 million or 56.16% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Internet Software & Services industry and the overall market, BANKRATE INC'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: RATE Ratings Report