NEW YORK ( TheStreet) -- Multi-Fineline Electronix (Nasdaq: MFLX) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth and notable return on equity. 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 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 270.5% when compared to the same quarter one year prior, rising from $2.38 million to $8.82 million.
- MFLX's revenue growth trails the industry average of 20.6%. Since the same quarter one year prior, revenues slightly increased by 6.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- MFLX has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, MFLX has a quick ratio of 1.69, which demonstrates the ability of the company to cover short-term liquidity needs.
- MULTI-FINELINE ELECTRON INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, MULTI-FINELINE ELECTRON INC reported lower earnings of $1.16 versus $1.81 in the prior year. This year, the market expects an improvement in earnings ($1.82 versus $1.16).
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, MULTI-FINELINE ELECTRON INC's return on equity is below that of both the industry average and the S&P 500.