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"We rate GLOBAL CASH ACCESS HOLDINGS (GCA) 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 largely solid financial position with reasonable debt levels by most measures and attractive valuation levels. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The current debt-to-equity ratio, 0.40, is low and is below the industry average, implying that there has been successful management of debt levels.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 6.4%. Since the same quarter one year prior, revenues slightly dropped by 0.4%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
- GLOBAL CASH ACCESS HOLDINGS reported flat earnings per share in the most recent quarter. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, GLOBAL CASH ACCESS HOLDINGS reported lower earnings of $0.36 versus $0.38 in the prior year. This year, the market expects an improvement in earnings ($0.88 versus $0.36).
- The change in net income from the same quarter one year ago has significantly exceeded that of the IT Services industry average, but is less than that of the S&P 500. The net income has decreased by 1.8% when compared to the same quarter one year ago, dropping from $5.78 million to $5.68 million.
- You can view the full analysis from the report here: GCA Ratings Report