NEW YORK ( TheStreet) -- Pro-Dex (Nasdaq: PDEX) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, attractive valuation levels and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 9.6%. Since the same quarter one year prior, revenues rose by 31.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • PDEX's debt-to-equity ratio is very low at 0.11 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, PDEX has a quick ratio of 1.95, which demonstrates the ability of the company to cover short-term liquidity needs.
  • 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 Health Care Equipment & Supplies industry and the overall market, PRO-DEX INC/CO's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • PRO-DEX INC/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 two years. During the past fiscal year, PRO-DEX INC/CO turned its bottom line around by earning $0.79 versus -$0.90 in the prior year.

Pro-Dex, Inc. engages in the development and manufacture of technology-based solutions that incorporate miniature rotary drive systems, embedded motion control, and fractional horsepower DC motors. The company has a P/E ratio of 2.8, equal to the average health services industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Pro-Dex has a market cap of $7.3 million and is part of the health care sector and health services industry. Shares are up 7% year to date as of the close of trading on Tuesday.

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