When TCS came public in 2011, it was all the rage on Wall Street. The stock was priced at $18 and soared to $47 within a week of IPOing. Their price to sales ratio in 2011 was 2.9x; today, following a 90% decline in its shares, the p/s is 0.35x.
Shareholders are getting a reprieve today, following a better than expected quarterly report — sending shares screaming higher by 40%.
Sales increased by 5.3%, while net income surged 143%. Gross margins slipped 20bps to 57.6% — thanks to an increase in lower margin produces and services. Part of the beat was attributed to better cost controls, with SG&A declining to 45.2% from 47.8%.
The company offered favorable guidance of $0.25-0.35 with sales ranging from $830 to $850m — above analyst expectations.
With 20% of shares sold short, this stock is going to rip the heads of late comer bears right off their flaccid torsos today.
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