NEW YORK (TheStreet) -- Shares of Synchronoss Technologies (SNCR) are gaining by 20.39% to $51.20 in pre-market trading on Wednesday morning, following reports that the company is exploring the possibility of a sale.
Synchronoss Technologies, a provider of cloud solutions and software-based activation for connected devices, is said to be working with the investment bank Qatalyst Partners on a possible sale, sources told The Wall Street Journal.
At the close of trading on Tuesday the company had a market cap of almost $1.8 billion, which could result in a takeover valued at over $2 billion, The Journal added, noting that a number of private equity firms have shown interest in an acquisition.
Separately, TheStreet Ratings team rates SYNCHRONOSS TECHNOLOGIES as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate SYNCHRONOSS TECHNOLOGIES (SNCR) 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 robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, good cash flow from operations and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 4.9%. Since the same quarter one year prior, revenues rose by 35.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- SYNCHRONOSS TECHNOLOGIES has improved earnings per share by 21.1% 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, SYNCHRONOSS TECHNOLOGIES increased its bottom line by earning $0.91 versus $0.58 in the prior year. This year, the market expects an improvement in earnings ($2.13 versus $0.91).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Software industry. The net income increased by 39.3% when compared to the same quarter one year prior, rising from $7.58 million to $10.56 million.
- Net operating cash flow has significantly increased by 98.81% to -$0.14 million when compared to the same quarter last year. In addition, SYNCHRONOSS TECHNOLOGIES has also vastly surpassed the industry average cash flow growth rate of -17.70%.
- The gross profit margin for SYNCHRONOSS TECHNOLOGIES is rather high; currently it is at 59.64%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, SNCR's net profit margin of 7.94% significantly trails the industry average.
- You can view the full analysis from the report here: SNCR Ratings Report