Compucom Software Receives 'Sell' Rating Due to Poor Long-Term Growth and Declining Profits

Compucom Software, a microcap IT education company, has recently received a 'Sell' rating from MarketsMOJO. This downgrade is based on the company's poor long-term growth, with net sales only growing at an annual rate of 2.49% over the last 5 years. Additionally, the company reported negative results in March 2024 after two consecutive positive quarters.
The company's profits have also taken a hit, with PAT(HY) at Rs 1.19 crore showing a decline of -60.73% and NET SALES(Q) at its lowest at Rs 8.45 crore. PBDIT(Q) is also at its lowest at Rs 0.98 crore. With a ROE of 3.8, the company's valuation is considered very expensive with a 1.7 price to book value. The stock is currently trading at a premium compared to its average historical valuations.

On the technical side, the stock is in a mildly bullish range with multiple factors such as MACD, KST, and OBV showing bullish signals. The company also has a low debt to equity ratio, which is a positive factor for investors.

The majority shareholders of Compucom Software are the promoters, indicating their confidence in the company's future. Despite the recent downgrade, the stock has outperformed the market (BSE 500) with a return of 58.22% in the last year, compared to the market's return of 35.99%.

Overall, while the stock may have some positive indicators, the recent downgrade and poor long-term growth may make it a risky investment. Investors should carefully consider all factors before making any decisions regarding Compucom Software.