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NEW YORK (TheStreet) -- Radcom (RDCM) - Get RADCOM Ltd. Report has been upgraded by TheStreet Ratings from Sell to Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate RADCOM (RDCM) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. 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 impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company's return on equity has been disappointing."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 3.1%. Since the same quarter one year prior, revenues rose by 26.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- RDCM 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, RDCM has a quick ratio of 1.67, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for RADCOM is rather high; currently it is at 65.97%. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, RDCM's net profit margin of 12.91% significantly trails the industry average.
- Powered by its strong earnings growth of 160.00% and other important driving factors, this stock has surged by 108.13% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Communications Equipment industry and the overall market, RADCOM's return on equity is below that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: RDCM Ratings Report