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"We rate GLOBALSCAPE INC (GSB) 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, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we find that the growth in the company's earnings per share has not been good."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- GSB's revenue growth has slightly outpaced the industry average of 11.5%. Since the same quarter one year prior, revenues rose by 12.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- GSB's debt-to-equity ratio is very low at 0.19 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.30, which illustrates the ability to avoid short-term cash problems.
- The gross profit margin for GLOBALSCAPE INC is currently very high, coming in at 97.05%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, GSB's net profit margin of 7.31% significantly trails the industry average.
- GLOBALSCAPE INC reported flat earnings per share in the most recent quarter. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, GLOBALSCAPE INC turned its bottom line around by earning $0.20 versus -$0.10 in the prior year.
- You can view the full analysis from the report here: GSB Ratings Report