NEW YORK ( TheStreet) -- optionsXpress Holdings (Nasdaq: OXPS) 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, notable return on equity, expanding profit margins and increase 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 Capital Markets industry average, but is less than that of the S&P 500. The net income increased by 19.7% when compared to the same quarter one year prior, going from $11.89 million to $14.23 million.
  • 38.60% is the gross profit margin for OPTIONSXPRESS HOLDINGS INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 21.60% is above that of the industry average.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Capital Markets industry and the overall market, OPTIONSXPRESS HOLDINGS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The debt-to-equity ratio is somewhat low, currently at 0.96, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
  • The revenue growth came in higher than the industry average of 0.9%. Since the same quarter one year prior, revenues rose by 15.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.

optionsXpress Holdings, Inc. provides brokerage and education services in the United States and internationally. The company offers Internet-based options, stock, bond, mutual fund, and futures brokerage services to retail customers. The company has a P/E ratio of 20.7, equal to the average financial services industry P/E ratio and above the S&P 500 P/E ratio of 16.7. optionsXpress has a market cap of $1.1 billion and is part of the financial sector and financial services industry. Shares are up 19.5% year to date as of the close of trading on Tuesday.

You can view the full optionsXpress Ratings Report or get investment ideas from our investment research center.
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