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NEW YORK ( TheStreet) -- Ixia (Nasdaq: XXIA) 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, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and largely solid financial position with reasonable debt levels by most measures. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 20.7%. Since the same quarter one year prior, revenues rose by 33.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 3200.00% and other important driving factors, this stock has surged by 48.85% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • IXIA 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, IXIA increased its bottom line by earning $0.34 versus $0.15 in the prior year. This year, the market expects an improvement in earnings ($0.74 versus $0.34).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Communications Equipment industry. The net income increased by 5814.1% when compared to the same quarter one year prior, rising from $0.45 million to $26.85 million.
  • Despite currently having a low debt-to-equity ratio of 0.51, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that XXIA's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.21 is high and demonstrates strong liquidity.

Ixia supplies converged network and application performance testing solutions in the United States and internationally. It designs and validates a range of Internet protocol (IP) and third generation/long-term evolution networking equipment. The company has a P/E ratio of 20.9, below the average electronics industry P/E ratio of 44.7 and above the S&P 500 P/E ratio of 17.7. Ixia has a market cap of $923.8 million and is part of the technology sector and electronics industry. Shares are up 42.3% year to date as of the close of trading on Monday.

You can view the full Ixia Ratings Report or get investment ideas from our investment research center.

-- 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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