NEW YORK ( TheStreet) -- Usana Health (NYSE: USNA) 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, attractive valuation levels, expanding profit margins and growth in earnings per share. We feel these strengths outweigh the fact that the company has had sub par growth in net income. Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 7.1%. Since the same quarter one year prior, revenues slightly increased by 6.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- USNA has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign.
- The gross profit margin for USANA HEALTH SCIENCES INC is currently very high, coming in at 82.40%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 8.60% is above that of the industry average.
- USANA HEALTH SCIENCES INC's earnings per share improvement from the most recent quarter was slightly positive. 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, USANA HEALTH SCIENCES INC increased its bottom line by earning $2.85 versus $2.17 in the prior year. This year, the market expects an improvement in earnings ($3.23 versus $2.85).