Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. NEW YORK (TheStreet) -- Given Imaging (Nasdaq:GIVN) 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, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.
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- The revenue growth came in higher than the industry average of 1.2%. Since the same quarter one year prior, revenues rose by 11.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- GIVN'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. Along with this, the company maintains a quick ratio of 4.43, which clearly demonstrates the ability to cover short-term cash needs.
- GIVEN IMAGING 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, GIVEN IMAGING increased its bottom line by earning $0.46 versus $0.38 in the prior year. This year, the market expects an improvement in earnings ($0.60 versus $0.46).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Equipment & Supplies industry. The net income increased by 70.7% when compared to the same quarter one year prior, rising from $3.04 million to $5.20 million.
- Net operating cash flow has increased to $8.83 million or 27.86% when compared to the same quarter last year. In addition, GIVEN IMAGING has also vastly surpassed the industry average cash flow growth rate of -37.62%.
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