NEW YORK ( TheStreet) -- Amerigon (Nasdaq: ARGN) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, robust revenue growth, notable return on equity, solid stock price performance and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows weak operating cash flow. 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 Auto Components industry. The net income increased by 136.4% when compared to the same quarter one year prior, rising from $1.40 million to $3.30 million.
- AMERIGON 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 two years. We feel that this trend should continue. During the past fiscal year, AMERIGON INC increased its bottom line by earning $0.44 versus $0.03 in the prior year. This year, the market expects an improvement in earnings ($0.48 versus $0.44).
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- The revenue growth came in higher than the industry average of 7.4%. Since the same quarter one year prior, revenues rose by 33.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 2.61 is very high and demonstrates very strong liquidity.