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) -- Vocera Communications (NYSE:VCRA) has been upgraded by TheStreet Ratings from sell to hold. 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 and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.
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- VCRA's revenue growth trails the industry average of 12.9%. Since the same quarter one year prior, revenues slightly increased by 0.4%. 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.
- VCRA has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.13, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for VOCERA COMMUNICATIONS INC is rather high; currently it is at 65.08%. Regardless of VCRA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, VCRA's net profit margin of -11.90% significantly underperformed when compared to the industry average.
- 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 Health Care Technology industry. The net income has significantly decreased by 278.6% when compared to the same quarter one year ago, falling from $1.74 million to -$3.10 million.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Health Care Technology industry and the overall market, VOCERA COMMUNICATIONS INC's return on equity significantly trails that of both the industry average and the S&P 500.
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