Today Virtusa (VRTU) Hits New Lifetime High

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified Virtusa ( VRTU) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Virtusa as such a stock due to the following factors:

  • VRTU has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $8.5 million.
  • VRTU has traded 5,123 shares today.
  • VRTU is trading at a new lifetime high.

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More details on VRTU:

Virtusa Corporation operates as an information technology services company in the United States. It offers application support and maintenance, development, systems integration, and managed services. VRTU has a PE ratio of 29. Currently there are 6 analysts that rate Virtusa a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Virtusa has been 107,100 shares per day over the past 30 days. Virtusa has a market cap of $1.2 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.87 and a short float of 1.8% with 2.58 days to cover. Shares are down 2.5% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Virtusa as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, good cash flow from operations and solid stock price performance. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 22.6%. Since the same quarter one year prior, revenues rose by 13.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • VIRTUSA CORP has improved earnings per share by 11.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, VIRTUSA CORP increased its bottom line by earning $1.44 versus $1.27 in the prior year. This year, the market expects an improvement in earnings ($1.74 versus $1.44).
  • 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 14.9% when compared to the same quarter one year prior, going from $10.05 million to $11.55 million.
  • Net operating cash flow has significantly increased by 82.55% to $17.15 million when compared to the same quarter last year. In addition, VIRTUSA CORP has also vastly surpassed the industry average cash flow growth rate of -11.65%.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. 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.

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