Retalix Ltd. Stock Upgraded (RTLX)

NEW YORK (TheStreet) -- Retalix (Nasdaq:RTLX) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:

• The revenue growth came in higher than the industry average of 0.6%. Since the same quarter one year prior, revenues rose by 11.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
• RTLX has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.86, which clearly demonstrates the ability to cover short-term cash needs.
• Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
• RETALIX LTD reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, RETALIX LTD increased its bottom line by earning $0.44 versus $0.30 in the prior year. This year, the market expects an improvement in earnings ($0.74 versus $0.44).
• The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Software industry. The net income increased by 83.2% when compared to the same quarter one year prior, rising from $1.56 million to $2.86 million.

Retalix Ltd. provides integrated software solutions to food and fuel retailers, grocery, convenience stores, and foodservice distributors primarily in Israel, the United States, and Europe. The company has a P/E ratio of 31.7, above the average computer software & services industry P/E ratio of 27.9 and above the S&P 500 P/E ratio of 17.7. Retalix has a market cap of $337.3 million and is part of the technology sector and computer software & services industry. Shares are up 1.3% year to date as of the close of trading on Thursday.

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• Retalix Ltd. Income Statement