NEW YORK ( TheStreet) -- EMS Technologies (Nasdaq: ELMG) 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, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results. Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Communications Equipment industry. The net income increased by 123.9% when compared to the same quarter one year prior, rising from -$25.56 million to $6.10 million.
- EMS TECHNOLOGIES INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, EMS TECHNOLOGIES INC turned its bottom line around by earning $0.92 versus -$0.87 in the prior year. This year, the market expects an improvement in earnings ($1.20 versus $0.92).
- Powered by its strong earnings growth of 131.49% and other important driving factors, this stock has surged by 34.27% 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, ELMG should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- ELMG's debt-to-equity ratio is very low at 0.11 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, ELMG has a quick ratio of 1.99, which demonstrates the ability of the company to cover short-term liquidity needs.
- The revenue growth came in higher than the industry average of 0.3%. Since the same quarter one year prior, revenues rose by 15.4%. Growth in the company's revenue appears to have helped boost the earnings per share.