NEW YORK ( TheStreet) -- ARC Wireless Solutions (Nasdaq: ARCW) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. 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:
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- ARC WIRELESS SOLUTIONS 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. During the past fiscal year, ARC WIRELESS SOLUTIONS INC continued to lose money by earning -$0.15 versus -$0.29 in the prior year.
- ARCW, with its decline in revenue, underperformed when compared the industry average of 9.5%. Since the same quarter one year prior, revenues fell by 27.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- 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 Communications Equipment industry and the overall market, ARC WIRELESS SOLUTIONS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for ARC WIRELESS SOLUTIONS INC is currently lower than what is desirable, coming in at 34.80%. Regardless of ARCW's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, ARCW's net profit margin of -13.70% significantly underperformed when compared to the industry average.