NEW YORK ( TheStreet) -- PRGX Global (Nasdaq: PRGX) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • This stock has managed to rise its share value by 36.71% over the past twelve months. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • Net operating cash flow has increased to $4.03 million or 28.59% when compared to the same quarter last year. In addition, PRGX GLOBAL INC has also modestly surpassed the industry average cash flow growth rate of 25.20%.
  • PRGX's debt-to-equity ratio is very low at 0.20 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.26, which illustrates the ability to avoid short-term cash problems.
  • PRGX's revenue growth trails the industry average of 23.5%. Since the same quarter one year prior, revenues rose by 11.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the IT Services industry. The net income increased by 1928.6% when compared to the same quarter one year prior, rising from $0.04 million to $0.71 million.

PRGX Global, Inc., a business analytics and information services company, together with its subsidiaries, provides recovery audit services principally to businesses and government agencies having numerous payment transactions and complex purchasing environments. The company has a P/E ratio of 22.4, below the average diversified services industry P/E ratio of 23.1 and above the S&P 500 P/E ratio of 17.7. PRGX Global has a market cap of $166.7 million and is part of the services sector and diversified services industry. Shares are up 6.5% year to date as of the close of trading on Tuesday.

You can view the full PRGX Global Ratings Report or get investment ideas from our investment research center.
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PRGX Global (PRGX) Downgraded From Hold to Sell