NEW YORK (TheStreet) -- Astea International (ATEA) stock is spiking on Tuesday after being awarded a contract to implement Astea Alliance for an unnamed leading global IT services company. Astea will provide the company software solutions for functions including field service, depot repair, customer self-service and logistics.
By early afternoon, shares had spiked 52.6% to $2.56. However, year to date, the stock is down 0.78%.
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TheStreet Ratings team rates ASTEA INTERNATIONAL INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate ASTEA INTERNATIONAL INC (ATEA) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, generally high debt management risk, disappointing return on equity and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- ASTEA INTERNATIONAL INC 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 reported a trend of declining earnings per share over the past two years. During the past fiscal year, ASTEA INTERNATIONAL INC reported poor results of -$0.92 versus -$0.19 in the prior year.
- 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 Software industry. The net income has significantly decreased by 243.2% when compared to the same quarter one year ago, falling from $0.66 million to -$0.94 million.
- The debt-to-equity ratio of 1.09 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, ATEA has a quick ratio of 0.55, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Software industry and the overall market, ASTEA INTERNATIONAL INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to $0.43 million or 75.70% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full analysis from the report here: ATEA Ratings Report