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Shares of CA Inc. (CA - Analyst Report) hit a new 52-week high of $33.54 on Dec 24, eventually closing at $33.41. The closing share price represents a strong one-year return of 51.1% and a year-to-date return of 46.9%.

Average volume of shares traded over the last 10 days (3,045K) increased from the average volume of shares traded over the last three months (2,542k).

The stock has a Zacks Rank #3 (Hold), with a market cap of $15.01 billion.

Key Growth Catalysts

Some of the current optimism surrounding the shares is related to the recently introduced solutions that would connect International Business Machines (IBM - Analyst Report) system z and the cloud. This cloud-based offering provides advanced solutions to customers, thereby balancing the workload across dynamic data centers and platforms.

Moreover, the launch of CA Nimsoft Monitor Snap, a feature-rich free utility version of its popular CA Nimsoft Monitor solution will also help CA to meet growing business needs with improved flexibility and security.

Additionally, CA’s cloud expansion and restructuring initiatives remain on track. A decent renewal rate, modest cash position and share repurchase activities also appear encouraging. The company’s endeavor to return cash to its investors in the form of dividend payments also boosts investor confidence.

Apart from this, the company witnessed total bookings of $877.0 million in the second-quarter of fiscal 2014, up 5.0% from the year-ago period. Revenues from North America remained flat while International revenues were down 3% from the year-ago quarter.

CA is gaining traction in the Mainframe Solutions and Services segments. In the last reported quarter, CA’s mainframe revenues were aided by higher sales of new products and mainframe capacity while Services revenues increased due to higher professional services engagements.

However, increasing competition from the likes of Hewlett-Packard (HPQ - Analyst Report) and Oracle Corp (ORCL - Analyst Report) and a tepid IT spending environment are the major headwinds.

Estimate Revision

The Zacks Consensus Estimate for the fiscal third-quarter of 2014 is pegged at 68 cents. Estimates for 2014 and 2015 remain unchanged at $2.86 and $2.42, respectively.
 

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