NEW YORK (
-- Westell Technologies
) 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, notable return on equity, attractive valuation levels and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the ratings report include:
- Powered by its strong earnings growth of 1875.00% and other important driving factors, this stock has surged by 157.14% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, WSTL should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- 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. Compared to other companies in the Communications Equipment industry and the overall market, WESTELL TECH INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- WSTL 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 3.23, which clearly demonstrates the ability to cover short-term cash needs.
- The revenue growth greatly exceeded the industry average of 9.0%. Since the same quarter one year prior, revenues rose by 31.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
Westell Technologies, Inc., through its subsidiaries, designs, distributes, markets, and services a range of broadband, digital transmission, remote monitoring, power distribution, and demarcation products used by telephone companies and other telecommunications service providers. The company has a P/E ratio of 16.1, equal to the average telecommunications industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Westell has a market cap of $191.6 million and is part of the
industry. Shares are up 10.1% year to date as of the close of trading on Thursday.
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