Unless you're an institutional investor or a heavy trader, it's a good bet you haven't heard of Interactive Data
In fiscal Q3, IDC posted an 11.7% increase in revenue, to $175 million. Net income was up 46.7% to $39.3 million, or $0.40 per share, though the company got a big boost from a tax benefit. Q3 operating cash flow was a healthy $63.4 million, or about 36% of revenue. In all, IDC has $251.8 million in the bank.
A key part of IDC's business is the Real-Time Services division, which saw a 16.1% increase in revenues to $35.4 million. In the brutally competitive financial services industry, it's critical to have real-time pricing data and accurate valuations.
IDC's space is undergoing consolidation, as seen with the megamerger between Thomson
It's also encouraging that the company is upping its guidance. The estimate for revenue growth in 2007 is now at 11%-12%, up from 10%-12%. The net income forecast is now 29%-31%, which compares to prior guidance of 20%-24%.
And if history is any indication, it's a good bet that IDC will deliver. The company has shown steady revenue growth of 11.8% and steady profit margins since 2000. More importantly, at approximately 14 times EBITDA, the valuation is reasonable. Consider that other data operators, like FactSet Research Systems
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