NEW YORK ( TheStreet) -- Net one Ueps Technologies (Nasdaq: UEPS) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and generally poor debt management. Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 0.6%. Since the same quarter one year prior, revenues rose by 41.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Software industry. The net income increased by 140.2% when compared to the same quarter one year prior, rising from -$17.01 million to $6.83 million.
- NET one UEPS TECHNOLOGIES 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, NET one UEPS TECHNOLOGIES INC reported lower earnings of $0.06 versus $0.82 in the prior year. This year, the market expects an improvement in earnings ($1.55 versus $0.06).
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Software industry and the overall market, NET one UEPS TECHNOLOGIES INC's return on equity significantly trails that of both the industry average and the S&P 500.
- UEPS's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 41.47%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.