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"We rate ATTUNITY LTD (ATTU) 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 robust revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 26.6%. Since the same quarter one year prior, revenues rose by 44.5%. 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.
- ATTU 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. To add to this, ATTU has a quick ratio of 1.81, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for ATTUNITY LTD is currently very high, coming in at 95.21%. Regardless of ATTU's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ATTU's net profit margin of 2.91% is significantly lower than the industry average.
- 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 60.9% when compared to the same quarter one year ago, falling from $0.71 million to $0.28 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, ATTUNITY LTD'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: ATTU Ratings Report