NEW YORK ( TheStreet) -- X-Rite (Nasdaq: XRIT) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, good cash flow from operations and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • The gross profit margin for X-RITE INC is rather high; currently it is at 67.70%. Regardless of XRIT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, XRIT's net profit margin of 13.20% significantly outperformed against the industry.
  • Net operating cash flow has increased to $18.08 million or 44.57% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 15.88%.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electronic Equipment, Instruments & Components industry. The net income increased by 338.1% when compared to the same quarter one year prior, rising from $1.94 million to $8.50 million.
  • X-RITE INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, X-RITE INC turned its bottom line around by earning $0.04 versus -$0.33 in the prior year. This year, the market expects an improvement in earnings ($0.31 versus $0.04).
  • The revenue growth came in higher than the industry average of 2.2%. Since the same quarter one year prior, revenues rose by 13.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.

X-Rite, Incorporated, a technology company, develops a range of color management systems primarily in the United States, Europe, and Asia. The company offers various management solutions comprising hardware, software, and services. The company has a P/E ratio of 27.5, above the S&P 500 P/E ratio of 17.7. X-Rite has a market cap of $401.3 million and is part of the consumer goods sector and consumer durables industry. Shares are up 1.3% year to date as of the close of trading on Monday.

You can view the full X-Rite Ratings Report or get investment ideas from our investment research center.
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