Why Aware (AWRE) Stock Is Soaring Today

NEW YORK (TheStreet) -- Shares of Aware Inc.  (AWRE) are up 14.44% to $6.50 in late trading on Friday after it announced that its board declared a special cash dividend of $1.75 per share, or approximately $40 million. 

The special cash dividend will be paid on July 24 to shareholders of record as of July 10.

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

"We rate AWARE INC (AWRE) a BUY. This is driven by a number of strengths, 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 revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, increase in stock price during the past year and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share."

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

  • The revenue growth came in higher than the industry average of 8.0%. Since the same quarter one year prior, revenues rose by 32.9%. 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.
  • AWRE 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 28.28, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has significantly increased by 87.28% to $1.21 million when compared to the same quarter last year. In addition, AWARE INC has also vastly surpassed the industry average cash flow growth rate of 10.04%.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The gross profit margin for AWARE INC is rather high; currently it is at 66.25%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, AWRE's net profit margin of 13.29% is significantly lower than the industry average.
  • You can view the full analysis from the report here: AWRE Ratings Report
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