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"We rate INTERXION HOLDING NV (INXN) a BUY. This is driven by multiple 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 compelling growth in net income, solid stock price performance, impressive record of earnings per share growth, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the IT Services industry. The net income increased by 143.3% when compared to the same quarter one year prior, rising from -$21.65 million to $9.37 million.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- INTERXION HOLDING NV 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, INTERXION HOLDING NV reported lower earnings of $0.14 versus $0.60 in the prior year. This year, the market expects an improvement in earnings ($0.53 versus $0.14).
- The gross profit margin for INTERXION HOLDING NV is rather high; currently it is at 58.79%. Regardless of INXN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, INXN's net profit margin of 10.22% compares favorably to the industry average.
- INXN, with its decline in revenue, underperformed when compared the industry average of 6.7%. Since the same quarter one year prior, revenues fell by 19.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- You can view the full analysis from the report here: INXN Ratings Report