Mastech Digital Inc (NYSEMKT: MHH) is among the top performing nano-cap companies with the market capitalization of only $80 million. Mastech shares rose 38% in the last three months, extending the full-year rally to 121%. The MHH stock currently trades around the highest level in the last 52-weeks, driven by strong financial numbers and an optimistic outlook.
Although Mastech shares increased sharply in the last twelve months, it’s share price valuations continue getting the support from increasing financial numbers. MHH stock trades around 0.34 time to earning and 2.10 time to sales, compared to industry average of 2.13 and 3.08, respectively.
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Here’s Why Mastech Digital Share Price Is Soaring
The company’s strategy of investing in organic and inorganic opportunities to attain the leading position in digital transformation services is working. The company’s acquisition of Canada-based InfoTrellis, Inc, which has proven strengths in data management and analytics, enhanced its financial numbers in the last two quarters
Mastech Digital posted year over year sales growth of 26% in Q4 from its Data and Analytics segment, supported by InfoTrellis acquisition and higher project wins.
The company has also been experiencing solid demand for its IT staffing services segment; the number of billable consultants jumped 12% to 983 in IT staffing services segment from the past year period.
The CEO says, “We continued to see strong demand and more notably was able to improve gross margins to 20.4% in the fourth quarter, which is approximately 70-basis points higher than the same quarter of 2016. Overall, it has been a great year for the Company.”
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Mastech Digital posted total revenue of $40 million in the fourth quarter of 2017, up 25% from the same period last year. The company’s cash position appears to be enough to cover the capital requirements. On December 31, 2017, its net of cash balances on hand was standing around $35.7 million with approximately $12.9 in revolving credit facility.
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