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 (
) 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, reasonable valuation levels, increase in net income and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 12.0%. Since the same quarter one year prior, revenues rose by 18.9%. Growth in the company's revenue appears to have helped boost 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 1.86, 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 significantly exceeded that of the S&P 500 and the IT Services industry. The net income increased by 288.1% when compared to the same quarter one year prior, rising from -$0.48 million to $0.90 million.
- CSP INC reported significant earnings per share improvement 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 $1.91 in the prior year.
CSP Inc., together with its subsidiaries, develops and markets information technology (IT) integration solutions and high-performance cluster computer systems to industrial, commercial, and defense customers in the Americas, Europe, and Asia. CSP has a market cap of $27.5 million and is part of the technology sector and computer software & services industry. Shares are down 5.2% year to date as of the close of trading on Friday.
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