Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model

NEW YORK (

TheStreet

)

-- Silicon Image

(Nasdaq:

SIMG

) has been upgraded by TheStreet Ratings from sell to hold. 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 increase in net income. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

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Highlights from the ratings report include:

  • SIMG's revenue growth has slightly outpaced the industry average of 13.8%. Since the same quarter one year prior, revenues rose by 19.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • SIMG 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 3.27, which clearly demonstrates the ability to cover short-term cash needs.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
  • SILICON IMAGE INC reported significant earnings per share improvement 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, SILICON IMAGE INC swung to a loss, reporting -$0.14 versus $0.09 in the prior year. This year, the market expects an improvement in earnings ($0.21 versus -$0.14).
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, SILICON IMAGE INC's return on equity significantly trails that of both the industry average and the S&P 500.

Silicon Image, Inc. provides wireless and wired connectivity solutions that enable the distribution and presentation of high-definition (HD) content for mobile, consumer electronics (CE), and personal computer (PC) markets. Silicon Image has a market cap of $408.8 million and is part of the

technology

sector and

electronics

industry. Shares are up 7.7% year to date as of the close of trading on Thursday.

You can view the full

Silicon Image Ratings Report

or get investment ideas from our

investment research center

.

-- Written by a member of TheStreet Ratings Staff

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model

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