NEW YORK ( TheStreet) -- ATMI (Nasdaq: ATMI) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, increase in stock price during the past year and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income. Highlights from the ratings report include:
- The gross profit margin for ATMI INC is rather high; currently it is at 54.40%. Regardless of ATMI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ATMI's net profit margin of 7.90% is significantly lower than the same period one year prior.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- ATMI 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 4.05, which clearly demonstrates the ability to cover short-term cash needs.
- The revenue growth came in higher than the industry average of 0.8%. Since the same quarter one year prior, revenues rose by 18.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.