NEW YORK (TheStreet) -- ORBCOMM (Nasdaq:ORBC) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself. Highlights from the ratings report include:
- ORBC's very impressive revenue growth greatly exceeded the industry average of 4.3%. Since the same quarter one year prior, revenues leaped by 101.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- ORBC's debt-to-equity ratio is very low at 0.03 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 5.95, which clearly demonstrates the ability to cover short-term cash needs.
- ORBCOMM INC 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 two years. We feel that this trend should continue. During the past fiscal year, ORBCOMM INC continued to lose money by earning -$0.01 versus -$0.04 in the prior year. This year, the market expects an improvement in earnings ($0.20 versus -$0.01).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Diversified Telecommunication Services industry. The net income increased by 429.5% when compared to the same quarter one year prior, rising from -$0.73 million to $2.41 million.
- Net operating cash flow has significantly increased by 394.78% to $1.70 million when compared to the same quarter last year. In addition, ORBCOMM INC has also vastly surpassed the industry average cash flow growth rate of -39.07%.
-- Written by a member of TheStreet Ratings Staff
TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
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