NEW YORK ( TheStreet) -- Ceradyne (Nasdaq: CRDN) 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, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results. Highlights from the ratings report include:
- CRDN's very impressive revenue growth greatly exceeded the industry average of 2.6%. Since the same quarter one year prior, revenues leaped by 61.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- CRDN's debt-to-equity ratio is very low at 0.13 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 5.08, which clearly demonstrates the ability to cover short-term cash needs.
- Powered by its strong earnings growth of 355.55% and other important driving factors, this stock has surged by 37.65% 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.
- CERADYNE 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 year. We feel that this trend should continue. During the past fiscal year, CERADYNE INC increased its bottom line by earning $1.17 versus $0.33 in the prior year. This year, the market expects an improvement in earnings ($3.17 versus $1.17).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Aerospace & Defense industry. The net income increased by 349.8% when compared to the same quarter one year prior, rising from $4.54 million to $20.41 million.