NEW YORK (TheStreet) -- Dataram Corp. (DRAM) stock is jumping by 26.63% to $2.52 on heavy volume in mid-morning trading on Thursday, after the memory products developer, manufacturer and marketer issued a statement saying it has begun to deliver improved sales performance.
The company attributes its improvement in sales activity to its "aggressive transformation to improve its market position and return the company to profitability."
So far today, 1.61 million shares of Dataram have exchanged hands as compared to its average daily volume of 8,000 shares.
As part of its transformation the company said it has reset its business strategy, added new talent, realigned its global sales team, deployed a new CRM solution and developed and communicated a new value proposition to its business partners and customers.
"Our efforts are beginning to deliver quantifiable results as demonstrated through recent wins and growing pipeline," Dataram CEO Dave Moylan said in a statement.
Separately, TheStreet Ratings team rates DATARAM CORP as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:
"We rate DATARAM CORP (DRAM) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The debt-to-equity ratio of 1.28 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, DRAM has a quick ratio of 0.70, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
- The gross profit margin for DATARAM CORP is rather low; currently it is at 15.38%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -8.29% is significantly below that of the industry average.
- Net operating cash flow has significantly decreased to -$2.10 million or 289.61% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The share price of DATARAM CORP has not done very well: it is down 22.10% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Computers & Peripherals industry and the overall market, DATARAM CORP'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: DRAM Ratings Report