NEW YORK (
) 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, increase in net income and growth in earnings per share. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the ratings report include:
- CSPI's revenue growth has slightly outpaced the industry average of 0.2%. Since the same quarter one year prior, revenues slightly increased by 2.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- CSPI 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. To add to this, CSPI has a quick ratio of 1.84, which demonstrates the ability of the company to cover short-term liquidity needs.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the IT Services industry average. The net income increased by 18.5% when compared to the same quarter one year prior, going from $0.39 million to $0.46 million.
- CSP INC has improved earnings per share by 18.2% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, CSP INC reported lower earnings of $0.10 versus $0.25 in the prior year.
- The gross profit margin for CSP INC is rather low; currently it is at 23.40%. Regardless of CSPI's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, CSPI's net profit margin of 2.20% is significantly lower than the same period one year prior.
CSP Inc., together with its subsidiaries, engages in developing and marketing information technology (IT) integration solutions and high-performance cluster computer systems to industrial, commercial, and defense customers worldwide. The company has a P/E ratio of 31.6, below the average computer software & services industry P/E ratio of 38 and above the S&P 500 P/E ratio of 17.7. CSP has a market cap of $12.9 million and is part of the
industry. Shares are up 16.8% year to date as of the close of trading on Monday.
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-- Written by a member of TheStreet RatingsStaff