NEW YORK (TheStreet) -- Shares of Sysorex(SYRX - Get Report) were gaining 32.1% to $2.76 on heavy trading volume Thursday after the announcement that the big data software company's Lilien Sysorex division was selected as a National Institutes of Health Information Technology Acquisition and Assessment Center (NITAAC) Prime Contract Holder.
Lilien Systems is one of 65 Prime Contract Holders selected under the Chief Information Officer - Commodities and Solutions (CIO-CS) contract.
The CIO-CS contract is a 10 year Indefinite Delivery/Indefinite Quantity with a maximum value of $20 billion. The contract has a 5-year based period from May 1, 2015 to April 30, 2020, and a 5-year option period from May 1, 2020 to April 30, 2025.
Under the contract Lilien Sysorex is allowed to fulfill task orders from federal, civilian, or Department of Defense agencies looking to acquire IT commodities and solutions.
About 3.7 million shares of Sysorex were traded by 11:07 a.m. Thursday, above the company's average trading volume of about 480,000 shares a day.
TheStreet Ratings team rates SYSOREX GLOBAL HOLDING CORP as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:
"We rate SYSOREX GLOBAL HOLDING CORP (SYRX) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, poor profit margins and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
¦The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the IT Services industry average. The net income has decreased by 23.5% when compared to the same quarter one year ago, dropping from -$1.46 million to -$1.81 million.
¦The gross profit margin for SYSOREX GLOBAL HOLDING CORP is currently lower than what is desirable, coming in at 29.81%. Regardless of SYRX's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, SYRX's net profit margin of -11.88% significantly underperformed when compared to the industry average.
¦SYRX's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 57.96%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
