Shares of IHS Inc. jumped Thursday after the technical data provider reported strong fiscal second-quarter results and backed its full-year revenue guidance.
Shares added $3.92, or 6.1 percent, to $68.42, with volume in morning trading nearing its normal daily average.
Late Wednesday, the Englewood, Colo., company said its profit for the quarter ended May 31 soared 25 percent, and adjusted results beat Wall Street estimates. The gains reflected strong growth in both its engineering and energy divisions. The top end of the company's forecast for full-year revenue growth between 21 percent and 23 percent was also ahead of analyst expectations.
Keybanc Capital Markets analyst Anurag Rana said the "most impressive" line in the company's results was its free cash flow, "the highest in any quarter since IHS went public." The stock began trading on the New York Stock Exchange in November 2005.
"We view the company's results favorably given its continued substantial margin improvement, opportunities for ongoing growth in both segments, and substantial free cash flow generation," Rana wrote in a note to clients. He kept a "Buy" rating on the stock and a price target of $77.
Goldman Sachs analyst Peter P. Appert said IHS "remains one of our favorite growth stories based on its appealing business model, an exceptional record of management execution, and the potential for meaningful further margin improvement." The second-quarter results "reinforce our confidence in the company's growth outlook," he told clients.
Terms & Conditions
RSS Headlines
Fool UK