NEW YORK ( TheStreet) -- Parametric Technology Corporation (Nasdaq: PMTC) 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, impressive record of earnings per share growth, compelling growth in net income and attractive valuation levels. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 1.1%. Since the same quarter one year prior, revenues rose by 27.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Although PMTC's debt-to-equity ratio of 0.24 is very low, it is currently higher than that of the industry average.
  • PARAMETRIC TECHNOLOGY CORP 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. We feel that this trend should continue. During the past fiscal year, PARAMETRIC TECHNOLOGY CORP increased its bottom line by earning $0.71 versus $0.21 in the prior year. This year, the market expects an improvement in earnings ($1.49 versus $0.71).
  • 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 384.7% when compared to the same quarter one year prior, rising from -$13.22 million to $37.62 million.

Parametric Technology Corporation develops, markets, and supports product lifecycle management (PLM) software solutions and services that help companies design products, manage product information, and improve product development processes worldwide. The company has a P/E ratio of 14.3, below the average computer software & services industry P/E ratio of 62.3 and below the S&P 500 P/E ratio of 17.7. Parametric Technology has a market cap of $2.1 billion and is part of the technology sector and computer software & services industry. Shares are down 5.5% year to date as of the close of trading on Monday.

You can view the full Parametric Technology Ratings Report or get investment ideas from our investment research center.
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