Amdocs, Paychex, Varian: Ratings Changes

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BOSTON (TheStreet) -- TheStreet.com's stock-rating model upgraded IT consultant Amdocs(DOX Quote) to "buy."

The numbers: Fiscal third-quarter net income decreased 15% to $86 million and earnings per share fell 9% to 42 cents, cushioned by a lower share count, as revenue declined 16% to $690 million. The operating margin hovered above 13% and the net margin remained steady at 12%. A quick ratio of 2.8 demonstrates ample liquidity and a debt-to-equity ratio of 0.1 indicates minimal leverage.

The stock: Amdocs is up 33% in 2009, outpacing major U.S. indices. The stock trades at a fair price-to-earnings ratio of 16, but doesn't pay dividends.

The model upgraded Jacobs Engineering Group(JEC Quote) to "buy."

The numbers: Fiscal third-quarter earnings declined 13% to $95 million, or 76 cents a share, as revenue decreased 7% to $2.7 billion. The operating margin hovered above 5% and the net margin remained steady over 3%. Jacobs has a strong financial position, evident in its quick ratio of 1.9, $1 billion of cash reserves and minimal debt.

The stock: Jacobs Engineering Group has fallen 3% in 2009, underperforming major U.S. indices. The stock trades at a price-to-earnings ratio of 14, indicating a discount to the market, and doesn't pay dividends.

The model upgraded data-processing outsourcer Paychex(PAYX Quote) to "buy."

The numbers: Fiscal fourth-quarter earnings decreased 16% to $114 million, or 32 cents a share, as revenue dropped 5% to $496 million. The operating margin declined from 38% to 35% and the net margin descended from 26% to 23%. Paychex has an ideal financial position, with no debt or interest expenses and ample cash reserves, reflected by a quick ratio of 1.1.