NEW YORK ( TheStreet) -- Quidel Corporation (Nasdaq: QDEL) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in net income, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 6.1%. Since the same quarter one year prior, revenues rose by 17.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Although QDEL's debt-to-equity ratio of 0.27 is very low, it is currently higher than that of the industry average.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Equipment & Supplies industry. The net income increased by 81.0% when compared to the same quarter one year prior, rising from -$5.86 million to -$1.11 million.
- 49.30% is the gross profit margin for QUIDEL CORP which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -3.40% is in-line with the industry average.
- Powered by its strong earnings growth of 85.71% and other important driving factors, this stock has surged by 57.58% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.