Ace Software Exports Receives 'Hold' Rating After Strong Financial Performance.

Ace Software Exports, a microcap IT software company, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes after the company declared positive results for the last three consecutive quarters. The company's profit after tax has grown by an impressive 545.83% to Rs 2.14 crore, while its net sales have also increased to Rs 23.06 crore. Additionally, the company's return on capital employed (ROCE) is at its highest at 18.48%.
From a technical standpoint, the stock is currently in a bullish range and has shown a 7.59% return since 15-Oct-24. Multiple factors such as MACD, Bollinger Band, KST, DOW, and OBV indicate a bullish trend for the stock.

The majority shareholders of Ace Software Exports are its promoters, which is a positive sign for investors. The stock has also outperformed BSE 500 in the last 3 years, 1 year, and 3 months, with a market-beating performance in the long term as well as the near term. In the last 1 year, the stock has generated a remarkable return of 1761.05%.

However, the company's long-term fundamental strength is weak, with an average return on equity (ROE) of 3.42%. Its net sales and operating profit have grown at an annual rate of 28.48% and 19.48%, respectively, over the last 5 years. The company's ability to service its debt is also a concern, with a poor EBIT to interest ratio of -1.67.

The stock is currently trading at a premium compared to its average historical valuations, with a price to book value of 9. This makes it a very expensive stock with a PEG ratio of 0. Despite its impressive returns in the past year, the company's profits have only risen by 612%, indicating a high valuation. Based on these factors, MarketsMOJO has upgraded its rating on Ace Software Exports to 'Hold'.