Tags: CA | thrives | analysts | competitiveness

CA Thrives but Analysts Concerned About Competitiveness

By    |   Friday, 31 Aug 2012 08:53 AM

CA Technologies (CA) is one of the larger IT consulting businesses to have survived the dot-com bubble to thrive as a provider for major companies worldwide. Nevertheless, analysts express concerns about competitiveness, arguing that it has not kept up as quickly with the shift to cheaper cloud computing models.

CA Technologies is an enterprise information technology (IT) management software and solutions company with expertise across IT environments, from mainframe and physical to virtual and cloud.

CA develops and delivers software and services that help organizations accelerate, transform and secure their IT infrastructures to deliver flexible IT services. This allows customers to respond faster to business demands for new services, manage the quality of services, increase efficiency and reduce risk, management said in a filing.

“We offer a broad portfolio of software solutions that address customer needs to accelerate, transform and secure IT environments, including mainframe; service assurance; security (identity and access management); service and portfolio management; and virtualization and service automation. We deliver our products on-premises or, for certain products, using Software-as-a-Service (SaaS).”

The company organizes its offerings into our Mainframe Solutions, Enterprise Solutions and Services operating segments.

“We use our portfolio of software and services and core strengths in IT management to help customers gain the most from existing IT investments and benefit from new technologies and business services that deliver a competitive advantage,” management said.

CA has a market cap of $12.02 billion in a sector, software, where the average company size is $12.51 billion. Its trailing 12-month P/E ratio is 13.01 and its five-year projected price-to-earnings-growth (PEG) ratio is 1.39, compared to 1.75 for the sector.

Its projected earnings per share growth for the coming year is 7.66 percent, compared to a sector average of 14.36 percent.


Analysts are positive on CA, with buy or outperform calls from Needham and Thomson Reuters/Verus.

“Our hold recommendation reflects our concern about CA's lack of revenue growth. We believe most of the growth in the IT industry will be focused on cloud computing,” Standard & Poor’s Equity Research analysts wrote on Aug. 28.

“Thus, we think CA will recover slower than other software companies, as it has a small presence in that market.”

CA next reports on Oct. 25.

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Friday, 31 Aug 2012 08:53 AM
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