NEW YORK ( TheStreet) -- Entertainment Gaming Asia (AMEX: EGT) has been upgraded by TheStreet Ratings from sell to hold. 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 and solid stock price performance. However, as a counter to these strengths, we find that the company's return on equity has been disappointing. Highlights from the ratings report include:
- 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 Hotels, Restaurants & Leisure industry and the overall market, ENTERTAINMENT GAMING ASIA's return on equity significantly trails that of both the industry average and the S&P 500.
- 37.70% is the gross profit margin for ENTERTAINMENT GAMING ASIA which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 11.10% trails the industry average.
- The current debt-to-equity ratio, 0.31, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, EGT has a quick ratio of 1.86, which demonstrates the ability of the company to cover short-term liquidity needs.
- The revenue growth greatly exceeded the industry average of 0.9%. Since the same quarter one year prior, revenues rose by 42.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.