Why Diebold (DBD) Stock Is Higher Today

NEW YORK (TheStreet) -- Shares of Diebold Inc.  (DBD) are up 1% to $39.15 after it announced it's adding 700 of its new Opteva automated teller machines to Euronet Worldwide's (EEFT) fleet across Europe.

Financial terms of the agreement were not disclosed.

This comes one day after Diebold announced an agreement to acquire Denmark-based Cryptera, a developer of secure payment technologies.

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Separately, TheStreet Ratings team rates DIEBOLD INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate DIEBOLD INC (DBD) 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 poor profit margins."

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

  • DBD's revenue growth has slightly outpaced the industry average of 2.4%. Since the same quarter one year prior, revenues slightly increased by 8.6%. Growth in the company's revenue appears to have helped boost 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.
  • DIEBOLD 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, DIEBOLD INC swung to a loss, reporting -$2.85 versus $1.20 in the prior year. This year, the market expects an improvement in earnings ($1.79 versus -$2.85).
  • The gross profit margin for DIEBOLD INC is currently lower than what is desirable, coming in at 27.11%. Regardless of DBD's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, DBD's net profit margin of 1.42% is significantly lower than the industry average.
  • 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 Computers & Peripherals industry and the overall market, DIEBOLD 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: DBD Ratings Report
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