NEW YORK ( TheStreet) -- Flexible Solutions International (AMEX: FSI) 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, solid stock price performance 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:
- 42.80% is the gross profit margin for FLEXIBLE SOLUTIONS INTL INC which we consider to be strong. Regardless of FSI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 8.20% trails the industry average.
- FLEXIBLE SOLUTIONS INTL INC's earnings per share declined by 25.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, FLEXIBLE SOLUTIONS INTL INC continued to lose money by earning -$0.01 versus -$0.05 in the prior year. This year, the market expects an improvement in earnings ($0.08 versus -$0.01).
- Compared to its closing price of one year ago, FSI's share price has jumped by 96.26%, exceeding the performance of the broader market during that same time frame. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- FSI's debt-to-equity ratio is very low at 0.22 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, FSI has a quick ratio of 1.83, which demonstrates the ability of the company to cover short-term liquidity needs.
- FSI's revenue growth has slightly outpaced the industry average of 25.3%. Since the same quarter one year prior, revenues rose by 28.7%. 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.