NEW YORK (TheStreet) -- Progress Software (PRGS) shares are up 3% to $23.84 on Friday after reporting third quarter earnings of 39 cents per share, 6 cents better than analysts estimated.
The global software company also issued fourth quarter earnings guidance between 44 cents and 47 cents per share, ahead of analysts consensus 44 cent per share expectations.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 team rates PROGRESS SOFTWARE CORP as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate PROGRESS SOFTWARE CORP (PRGS) 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 impressive record of earnings per share growth, increase in net income and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- PROGRESS SOFTWARE CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, PROGRESS SOFTWARE CORP increased its bottom line by earning $0.73 versus $0.71 in the prior year. This year, the market expects an improvement in earnings ($1.42 versus $0.73).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Software industry. The net income increased by 227.3% when compared to the same quarter one year prior, rising from $3.91 million to $12.80 million.
- Net operating cash flow has increased to $17.12 million or 25.47% when compared to the same quarter last year. Despite an increase in cash flow, PROGRESS SOFTWARE CORP's cash flow growth rate is still lower than the industry average growth rate of 41.71%.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Software industry and the overall market, PROGRESS SOFTWARE CORP's return on equity is below that of both the industry average and the S&P 500.
- PRGS has underperformed the S&P 500 Index, declining 6.91% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- You can view the full analysis from the report here: PRGS Ratings Report