IHS, an energy and power design information provider, is engaged in the provision of analytics and information to organizations.
The firm raised 2016 earnings estimates to $6.41 from $6.29 per share.
Since its IPO in 2005, IHS has made 70 acquisitions and plans to continue this growth strategy by focusing on larger acquisitions, Deutsche Bank noted.
"IHS considers larger acquisitions to be more productive and provide more operating leverage," Deutsche Bank analysts said.
Management plans on making acquisitions in areas where it has the most scale such as automotive, energy, and telecom, Deutsche Bank added.
Separately, TheStreet Ratings team rates IHS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate IHS INC (IHS) a BUY. This is driven by some important positives, 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, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and good cash flow from operations. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- IHS's revenue growth has slightly outpaced the industry average of 1.2%. Since the same quarter one year prior, revenues slightly increased by 4.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- IHS INC has improved earnings per share by 21.3% 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, IHS INC increased its bottom line by earning $2.83 versus $1.97 in the prior year. This year, the market expects an improvement in earnings ($5.85 versus $2.83).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Professional Services industry. The net income increased by 21.9% when compared to the same quarter one year prior, going from $32.42 million to $39.52 million.
- The gross profit margin for IHS INC is rather high; currently it is at 60.56%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 7.23% is above that of the industry average.
- Net operating cash flow has increased to $188.04 million or 22.21% when compared to the same quarter last year. In addition, IHS INC has also modestly surpassed the industry average cash flow growth rate of 19.21%.
- You can view the full analysis from the report here: IHS Ratings Report