Skip to main content

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

)

-- OSI Systems

(Nasdaq:

OSIS

) 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, growth in earnings per share, increase in net income and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

TheStreet Recommends

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 1.1%. Since the same quarter one year prior, revenues rose by 21.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • OSIS's debt-to-equity ratio is very low at 0.15 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.71 is somewhat weak and could be cause for future problems.
  • OSI SYSTEMS INC has improved earnings per share by 18.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, OSI SYSTEMS INC reported lower earnings of $2.15 versus $2.25 in the prior year. This year, the market expects an improvement in earnings ($3.30 versus $2.15).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Electronic Equipment, Instruments & Components industry average. The net income increased by 17.3% when compared to the same quarter one year prior, going from $12.42 million to $14.57 million.

OSI Systems, Inc., together with its subsidiaries, designs and manufactures electronic systems and components for homeland security, healthcare, defense, and aerospace markets worldwide. The company has a P/E ratio of 23.7, above the S&P 500 P/E ratio of 17.7. OSI Systems has a market cap of $1.13 billion and is part of the industrial goods sector and industrial industry. Shares are up 6.1% year to date as of the close of trading on Thursday.

You can view the full

OSI Systems Ratings Report

or get investment ideas from our

investment research center

.

3x UPSIDE POTENTIAL: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more

.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.