NEW YORK ( TheStreet) -- TGC Industries (Nasdaq: TGE) 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, compelling growth in net income and attractive valuation levels. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • TGE's revenue growth has slightly outpaced the industry average of 29.6%. Since the same quarter one year prior, revenues rose by 35.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • TGE's debt-to-equity ratio is very low at 0.14 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, TGE has a quick ratio of 1.57, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Powered by its strong earnings growth of 171.42% and other important driving factors, this stock has surged by 64.90% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, TGE should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Energy Equipment & Services industry. The net income increased by 182.3% when compared to the same quarter one year prior, rising from -$1.27 million to $1.05 million.

TGC Industries, Inc. provides geophysical services for clients in the oil and gas business in the United States and Canada. The company has a P/E ratio of 12.9, equal to the average energy industry P/E ratio and below the S&P 500 P/E ratio of 17.7. TGC has a market cap of $103.9 million and is part of the basic materials sector and energy industry. Shares are up 55.8% year to date as of the close of trading on Thursday.

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

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