NEW YORK ( TheStreet) -- I.D. Systems (Nasdaq: IDSY) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we find that the company's return on equity has been disappointing. Highlights from the ratings report include:
- 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 Electronic Equipment, Instruments & Components industry and the overall market, I D SYSTEMS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Electronic Equipment, Instruments & Components industry average, but is greater than that of the S&P 500. The net income increased by 38.8% when compared to the same quarter one year prior, rising from -$3.04 million to -$1.86 million.
- I D SYSTEMS INC has improved earnings per share by 37.0% 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, I D SYSTEMS INC reported poor results of -$1.19 versus -$0.38 in the prior year. This year, the market expects an improvement in earnings (-$0.07 versus -$1.19).
- IDSY 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 3.16, which clearly demonstrates the ability to cover short-term cash needs.
- IDSY's very impressive revenue growth greatly exceeded the industry average of 47.3%. Since the same quarter one year prior, revenues leaped by 252.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.