NEW YORK ( TheStreet) -- GeoEye Inc (Nasdaq: GEOY) 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, impressive record of earnings per share growth, expanding profit margins 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 Aerospace & Defense industry. The net income increased by 320.9% when compared to the same quarter one year prior, rising from -$6.38 million to $14.09 million.
- GEOEYE 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, GEOEYE INC reported lower earnings of $0.97 versus $1.53 in the prior year. This year, the market expects an improvement in earnings ($2.20 versus $0.97).
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 1.7%. Since the same quarter one year prior, revenues slightly dropped by 0.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The gross profit margin for GEOEYE INC is rather high; currently it is at 66.80%. Regardless of GEOY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GEOY's net profit margin of 16.40% compares favorably to the industry average.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Aerospace & Defense industry and the overall market, GEOEYE INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.