Editor's Note: 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 NEW YORK (TheStreet) -- RELM Wireless Corporation (AMEX:RWC) 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 the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
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- RWC's very impressive revenue growth greatly exceeded the industry average of 16.2%. Since the same quarter one year prior, revenues leaped by 99.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- RWC's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, RWC has a quick ratio of 2.25, which demonstrates the ability of the company to cover short-term liquidity needs.
- Powered by its strong earnings growth of 250.00% and other important driving factors, this stock has surged by 65.13% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, RWC should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- RELM WIRELESS CORP 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, RELM WIRELESS CORP continued to lose money by earning -$0.03 versus -$0.05 in the prior year. This year, the market expects an improvement in earnings ($0.10 versus -$0.03).
- 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 245.7% when compared to the same quarter one year prior, rising from -$0.86 million to $1.25 million.
-- Written by a member of TheStreet Ratings Staff
Editor's Note: 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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