Patni Computer Systems Ltd. (PTI) hit a new 52-week high yesterday but is still a value stock with a PEG ratio of just 0.93. The IT services company has surprised on estimates 3 out of the last 4 quarters by an average of 38.36%.
Company Description
Patni Computer Systems provides IT services and business solutions to clients around the world including business and technology consulting, infrastructure management services and customer interaction services and business process outsourcing.
Headquartered in Mumbai, India, the company has global delivery centers in 12 cities worldwide and 27 international offices.
Patni Surprised by 60.71% in the Second Quarter
On July 30, Patni reported second quarter estimates that surprised on the Zacks Consensus Estimate by 17 cents. Earnings per share were 45 cents compared to the Zacks Consensus Estimate of 28 cents.
Revenues rose 3.3% to $161.9 million from $156.7 million in the first quarter but fell 11.3% on the year over year basis. Sales from the top customer remained unchanged quarter over quarter at 12.3% of total revenues.
Third Quarter Outlook
The company provided revenue guidance between $163 million and $165 million for the third quarter. Mark to market foreign exchange loss during the third quarter is expected to be approximately $4 million depending on currency movements during the quarter.
Zacks Consensus Estimates Jump
Given the strong second quarter, and that the company has surprised the first two quarters of the year, analysts have been busy raising estimates.
The third quarter Zacks Consensus Estimate rose 7 cents to 34 cents in the last month.
The full-year Zacks Consensus Estimate jumped 29% to $1.34 from $1.04 per share with all 5 covering analysts raising in the last 30 days.
Value Fundamentals
Patni Computer Systems is a Zacks #1 Rank (strong buy) stock. It has a forward P/E of 12.44 and a price-to-book ratio of 1.88.
The company has a solid 5-year average return on equity (ROE) of 15.08%. As an added bonus, Patni pays a dividend with a current yield of 0.70%.
Hitting 52-Week Highs
Patni’s stock has been on fire recently, hitting a new 52-week high yesterday. See the chart below:
