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"We rate TERADATA CORP (TDC) a BUY. This is driven by several positive factors, 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 revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- TDC's revenue growth has slightly outpaced the industry average of 6.3%. Since the same quarter one year prior, revenues slightly increased by 0.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- TDC's debt-to-equity ratio is very low at 0.14 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, TDC has a quick ratio of 1.78, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has significantly increased by 59.37% to $102.00 million when compared to the same quarter last year. In addition, TERADATA CORP has also vastly surpassed the industry average cash flow growth rate of -2.41%.
- The gross profit margin for TERADATA CORP is rather high; currently it is at 59.22%. Regardless of TDC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TDC's net profit margin of 14.09% compares favorably to the industry average.
- You can view the full analysis from the report here: TDC Ratings Report
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