NEW YORK ( TheStreet) -- OCZ Technology Group (Nasdaq: OCZ) has been upgraded by TheStreet Ratings from sell to hold. 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 and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and poor profit margins. Highlights from the ratings report include:
- OCZ's very impressive revenue growth greatly exceeded the industry average of 38.1%. Since the same quarter one year prior, revenues leaped by 106.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- OCZ 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. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.40, which illustrates the ability to avoid short-term cash problems.
- OCZ TECHNOLOGY GROUP 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, OCZ TECHNOLOGY GROUP INC reported poor results of -$1.04 versus -$0.31 in the prior year. This year, the market expects an improvement in earnings ($0.06 versus -$1.04).
- The gross profit margin for OCZ TECHNOLOGY GROUP INC is rather low; currently it is at 22.10%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, OCZ's net profit margin of 4.10% is significantly lower than the same period one year prior.
- Net operating cash flow has significantly decreased to -$19.01 million or 330.25% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.