NEW YORK ( TheStreet) -- GSI Group (Nasdaq: GSIG) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its 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 return on equity has been disappointing. Highlights from the ratings report include:
- GSIG's revenue growth has slightly outpaced the industry average of 15.5%. Since the same quarter one year prior, revenues rose by 18.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.54, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, GSIG has a quick ratio of 2.40, which demonstrates the ability of the company to cover short-term liquidity needs.
- 47.20% is the gross profit margin for GSI GROUP INC which we consider to be strong. Regardless of GSIG's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GSIG's net profit margin of 9.90% compares favorably to the industry average.
- Powered by its strong earnings growth of 190.90% and other important driving factors, this stock has surged by 50.60% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
- 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. When compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, GSI GROUP INC's return on equity is below that of both the industry average and the S&P 500.