NEW YORK ( TheStreet) -- Orion Energy Systems (AMEX: OESX) 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 impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company's profit margins have been poor overall. Highlights from the ratings report include:
- The gross profit margin for ORION ENERGY SYSTEMS INC is currently lower than what is desirable, coming in at 32.90%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 5.60% trails that of the industry average.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Electrical Equipment industry and the overall market, ORION ENERGY SYSTEMS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- OESX's debt-to-equity ratio is very low at 0.06 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, OESX has a quick ratio of 2.33, which demonstrates the ability of the company to cover short-term liquidity needs.
- OESX's very impressive revenue growth greatly exceeded the industry average of 6.1%. Since the same quarter one year prior, revenues leaped by 67.6%. Growth in the company's revenue appears to have helped boost the earnings per share.