NEW YORK ( TheStreet) -- BroadVision (Nasdaq: BVSN) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity. 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 Internet Software & Services industry and the overall market, BROADVISION INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet Software & Services industry. The net income has significantly decreased by 38.0% when compared to the same quarter one year ago, falling from $0.45 million to $0.28 million.
- The revenue fell significantly faster than the industry average of 22.0%. Since the same quarter one year prior, revenues fell by 29.8%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- Net operating cash flow has increased to -$1.25 million or 12.65% when compared to the same quarter last year. Despite an increase in cash flow, BROADVISION INC's cash flow growth rate is still lower than the industry average growth rate of 24.40%.
- BVSN 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 5.58, which clearly demonstrates the ability to cover short-term cash needs.