NEW YORK ( TheStreet) -- Mindray Medical International (NYSE: MR) 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, growth in earnings per share, expanding profit margins and increase in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself. Highlights from the ratings report include:
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Health Care Equipment & Supplies industry. The net income increased by 4.2% when compared to the same quarter one year prior, going from $36.20 million to $37.71 million.
- The gross profit margin for MINDRAY MEDICAL INTL -ADR is rather high; currently it is at 59.20%. Regardless of MR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, MR's net profit margin of 20.80% compares favorably to the industry average.
- MINDRAY MEDICAL INTL -ADR's earnings per share improvement from the most recent quarter was slightly positive. 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, MINDRAY MEDICAL INTL -ADR increased its bottom line by earning $1.32 versus $1.23 in the prior year. This year, the market expects an improvement in earnings ($1.52 versus $1.32).
- MR's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.27, which clearly demonstrates the ability to cover short-term cash needs.
- The revenue growth came in higher than the industry average of 0.7%. Since the same quarter one year prior, revenues rose by 24.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.