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USA Technologies Inc. Stock Upgraded (USAT)

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) -- USA Technologies (Nasdaq: USAT) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and compelling growth in net income. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 18.1%. Since the same quarter one year prior, revenues rose by 29.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Powered by its strong earnings growth of 100.00% and other important driving factors, this stock has surged by 88.49% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • 49.10% is the gross profit margin for USA TECHNOLOGIES INC which we consider to be strong. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, USAT's net profit margin of 1.73% significantly trails the industry average.
  • Although USAT's debt-to-equity ratio of 0.07 is very low, it is currently higher than that of the industry average. Despite the fact that USAT's debt-to-equity ratio is low, the quick ratio, which is currently 0.66, displays a potential problem in covering short-term cash needs.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Computers & Peripherals industry and the overall market, USA TECHNOLOGIES INC's return on equity significantly trails that of both the industry average and the S&P 500.
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USA Technologies, Inc. provides wireless networking, cashless transactions, asset monitoring, and other value-added services principally to the small ticket unattended retail markets in the United States and internationally. USA has a market cap of $71.2 million and is part of the services sector and diversified services industry. Shares are up 24.1% year to date as of the close of trading on Wednesday.

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

-- 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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