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 robust revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in net income, good cash flow from operations and solid stock price performance. 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:
- ISSC's very impressive revenue growth greatly exceeded the industry average of 7.5%. Since the same quarter one year prior, revenues leaped by 69.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- ISSC 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 4.47, which clearly demonstrates the ability to cover short-term cash needs.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Aerospace & Defense industry. The net income increased by 217.3% when compared to the same quarter one year prior, rising from $0.32 million to $1.01 million.
- Net operating cash flow has significantly increased by 86.63% to -$0.22 million when compared to the same quarter last year. In addition, INNOVATIVE SOLTNS & SUPP INC has also vastly surpassed the industry average cash flow growth rate of 3.82%.
- Powered by its strong earnings growth of 200.00% and other important driving factors, this stock has surged by 76.37% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
Innovative Solutions and Support, Inc., a systems integrator, designs, manufactures, sells, and services flight guidance and cockpit display systems. Innovative Solutions and Support has a market cap of $135 million and is part of the industrial goods sector and aerospace/defense industry. Shares are up 9.6% year to date as of the close of trading on Friday.
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