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"We rate BROADSOFT INC (BSFT) 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, solid stock price performance and increase in net income. However, as a counter to these strengths, we find that the company's return on equity has been disappointing."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- BSFT's revenue growth has slightly outpaced the industry average of 26.6%. Since the same quarter one year prior, revenues rose by 27.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- BROADSOFT INC has improved earnings per share by 42.9% 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, BROADSOFT INC swung to a loss, reporting -$0.31 versus $0.43 in the prior year. This year, the market expects an improvement in earnings ($1.29 versus -$0.31).
- The gross profit margin for BROADSOFT INC is currently very high, coming in at 80.18%. Regardless of BSFT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BSFT's net profit margin of -4.19% significantly underperformed when compared to the industry average.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Software industry and the overall market, BROADSOFT INC'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: BSFT Ratings Report