S1 Corporation (NASDAQ: SONE) provides
financial institutions, retailers and processors with enterprise service software products designed to facilitate online transactions, branch/call center customer interactions, and sales/service operations. Application packages address such specialties as investments, insurance, customer relationship management and banking processes. S1 also offers data center and application hosting services. It operates under technology alliances with the likes of Cisco Systems (NASDAQ: CSCO), IBM (NYSE: IBM) and Microsoft (NASDAQ: MSFT).
The company pleased investors last week, when it reported Q4 EPS of 11 cents and revenues of $53.4 million. Analysts had been expecting eight cents and $53.1 million. Management also guided FY08 EPS to 37-40 cents (38 cent consensus) and FY08 revenues to $216-$220 million ($219.2M consensus).
The share price
popped on the news and then moved into a bullish "flag" consolidation pattern. Stocks frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Brokers recommend the issue with two "strong buys" and two "holds." The SONE Price to Sales ratio (2.05), Price to Book ratio (2.02) and EPS Growth rate (-0.01 to 0.11 yr/yr) compare favorably with industry, sector and S&P 500 averages. Institutions hold about 86% of the outstanding shares. Over the past 52 weeks, the stock has traded between $5.17 and $9.79. A stop-loss of $6.10 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.
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