Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. The Computer Software & Services industry as a whole was unchanged today versus the S&P 500, which was up 0.2%. Laggards within the Computer Software & Services industry included CounterPath ( CPAH), down 2.6%, GSE Systems ( GVP), down 3.2%, Intelligent Systems ( INS), down 2.7%, Kingtone Wirelessinfo Solution ( KONE), down 6.8% and Issuer Direct ( ISDR), down 7.2%. TheStreet Ratings Group would like to highlight 3 stocks that pushed the industry lower today: Stamps.com ( STMP) is one of the companies that pushed the Computer Software & Services industry lower today. Stamps.com was down $0.74 (2.1%) to $34.43 on average volume. Throughout the day, 160,601 shares of Stamps.com exchanged hands as compared to its average daily volume of 152,900 shares. The stock ranged in price between $33.98-$35.37 after having opened the day at $35.37 as compared to the previous trading day's close of $35.16. Stamps.com Inc. provides Internet-based postage solutions in the United States. Stamps.com has a market cap of $570.4 million and is part of the technology sector. Shares are down 16.5% year-to-date as of the close of trading on Thursday. Currently there is 1 analyst who rates Stamps.com a buy, no analysts rate it a sell, and 2 rate it a hold. STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. TheStreet Ratings rates Stamps.com as a buy. 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, reasonable valuation levels, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income. Highlights from TheStreet Ratings analysis on STMP go as follows:
- STMP's revenue growth trails the industry average of 21.3%. Since the same quarter one year prior, revenues slightly increased by 3.7%. 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.
- STMP has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 5.68, which clearly demonstrates the ability to cover short-term cash needs.
- Net operating cash flow has increased to $18.47 million or 43.76% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 23.24%.
- The gross profit margin for STAMPS.COM INC is currently very high, coming in at 80.06%. 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 22.02% trails the industry average.
- GSE SYSTEMS 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, GSE SYSTEMS INC swung to a loss, reporting -$0.58 versus $0.06 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 75.2% when compared to the same quarter one year ago, falling from -$1.16 million to -$2.02 million.
- 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, GSE SYSTEMS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for GSE SYSTEMS INC is currently lower than what is desirable, coming in at 25.86%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -23.20% is significantly below that of the industry average.
- The revenue fell significantly faster than the industry average of 7.5%. Since the same quarter one year prior, revenues fell by 29.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.