Why IHS (IHS) Stock Is Spiking Today

NEW YORK (TheStreet) -- IHS (IHS) shares are up 3% to $134.10 on Thursday after reporting second quarter earnings ahead of analysts expectations.

The company, which is an energy and power design information provider, reported earnings of $1.47 per diluted share during the quarter, 3 cents better than what analysts had expected.

Revenue for the quarter rose 36% over the previous year to $568 million, well ahead of analysts $550.2 million forecast. 

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TheStreet Ratings team rates IHS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate IHS INC (IHS) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins, good cash flow from operations, increase in stock price during the past year and growth in earnings per share. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 11.9%. Since the same quarter one year prior, revenues rose by 37.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The gross profit margin for IHS INC is rather high; currently it is at 58.86%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 6.18% is above that of the industry average.
  • Net operating cash flow has increased to $153.86 million or 16.83% when compared to the same quarter last year. In addition, IHS INC has also modestly surpassed the industry average cash flow growth rate of 10.64%.
  • 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, the stock's 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 the other strengths this company displays justify these higher price levels.
  • IHS INC has improved earnings per share by 27.0% 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, IHS INC reported lower earnings of $1.97 versus $2.36 in the prior year. This year, the market expects an improvement in earnings ($5.79 versus $1.97).
  • You can view the full analysis from the report here: IHS Ratings Report
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