NEW YORK ( TheStreet) -- Knot (Nasdaq: KNOT) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. 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:
- Net operating cash flow has significantly increased by 629.32% to $3.46 million when compared to the same quarter last year. In addition, KNOT INC has also vastly surpassed the industry average cash flow growth rate of 24.60%.
- KNOT 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 6.96, which clearly demonstrates the ability to cover short-term cash needs.
- KNOT's revenue growth trails the industry average of 22.2%. Since the same quarter one year prior, revenues slightly increased by 9.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet Software & Services industry. The net income increased by 125.0% when compared to the same quarter one year prior, rising from -$6.05 million to $1.51 million.
- KNOT 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, KNOT INC turned its bottom line around by earning $0.10 versus -$0.16 in the prior year. This year, the market expects an improvement in earnings ($0.15 versus $0.10).