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Support.com Inc.

 

Provides cloud-based services and software that power technology support programs and technical support organizations. The Company’s technology support programs help brands create new revenue streams and customer relationships. 

 

 

Key  Ratios

 

Ratio

Value

PE Ratio

46.67

Fwd PE Ratio

25.45

Return on Assets

6.80%

Return on Equity

8.10%

5 Year Sales Growth

10.60%

Price to Sales

3.67

 

 

This company is finally beginning to enter the black after years in the red. The growth potential seems to be strong in an industry that isn't going anywhere.   This company has exceptional liquidity ratios and no long term debt. If this company continues to maintain its current level of growth,  things could really take off over the next couple of years based on the ratios below.

Support.com Inc. is constantly reducing costs.  They have managed to reduce their operating expenses relative to revenue by almost half of the 2010 figure. Not only is management finding more efficient ways to reduce operating costs, they have also improved their gross margins considerably by cutting down on costs of goods sold.

 

Based on the trends let's assume  the company reaches the following data points in 3 years:

Ratio

Value

Annualized 3 Year Growth Rate

10%

COGS to Sales

40%

Operating Expenses to Sales

38%

Assumed Tax Rate

20%

Based on this the company would earn: 

Recommendation

This company has many reasons an investor should get excited.  They have no debt, they find ways to ut costs, and most importantly they are in an industry with strong growth prospects. However, at the current market price, it is hard to strongly justify buying this security.  I would recommend  a buy and if the markets get panicky and the price falls below $4.50 I would upgrade this rating to a strong buy.

 

Prediction: Look for this stock price to exceed $7.00 by 2017. 

Comments   

0 # Financial Advisor 2017-09-16 07:16
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0 # BenedictSmall 2018-02-19 12:42
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