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) -- Audience (Nasdaq:ADNC) 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, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, unimpressive growth in net income and weak operating cash flow.
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- The revenue growth greatly exceeded the industry average of 4.7%. Since the same quarter one year prior, revenues rose by 35.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- ADNC's debt-to-equity ratio is very low at 0.08 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 4.50, which clearly demonstrates the ability to cover short-term cash needs.
- When compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, AUDIENCE INC's return on equity is below that of both the industry average and the S&P 500.
- AUDIENCE INC's earnings per share declined by 50.0% in the most recent quarter compared to the same quarter a year ago. For the next year, the market is expecting a contraction of 54.0% in earnings ($0.34 versus $0.74).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Electronic Equipment, Instruments & Components industry. The net income has significantly decreased by 38.3% when compared to the same quarter one year ago, falling from $4.33 million to $2.67 million.
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