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"We rate LOGMEIN INC (LOGM) 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 compelling growth in net income. However, as a counter to these strengths, we find that the company's return on equity has been disappointing."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- LOGM's revenue growth has slightly outpaced the industry average of 28.9%. Since the same quarter one year prior, revenues rose by 35.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- LOGM 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, LOGM has a quick ratio of 1.59, which demonstrates the ability of the company to cover short-term liquidity needs.
- LOGMEIN INC has shown improvement in its earnings for its most recently reported quarter when compared with the same quarter a year earlier. 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, LOGMEIN INC swung to a loss, reporting -$0.32 versus $0.14 in the prior year. This year, the market expects an improvement in earnings ($1.16 versus -$0.32).
- This stock has managed to rise its share value by 50.42% over the past twelve months. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Internet Software & Services industry and the overall market, LOGMEIN 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: LOGM Ratings Report
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