NEW YORK ( TheStreet) -- Matrix Service Company (Nasdaq: MTRX) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins. Highlights from the ratings report include:
- Powered by its strong earnings growth of 231.25% and other important driving factors, this stock has surged by 28.13% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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.
- MATRIX SERVICE CO 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 year. We feel that this trend should continue. During the past fiscal year, MATRIX SERVICE CO increased its bottom line by earning $0.71 versus $0.18 in the prior year. This year, the market expects an improvement in earnings ($1.00 versus $0.71).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Energy Equipment & Services industry. The net income increased by 234.4% when compared to the same quarter one year prior, rising from -$4.23 million to $5.68 million.
- The revenue growth significantly trails the industry average of 48.3%. Since the same quarter one year prior, revenues rose by 16.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- MTRX's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, MTRX has a quick ratio of 1.63, which demonstrates the ability of the company to cover short-term liquidity needs.