NEW YORK ( TheStreet) -- eMagin Corporation (AMEX: EMAN) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including premium valuation, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share. Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has significantly exceeded that of the Electronic Equipment, Instruments & Components industry average, but is less than that of the S&P 500. The net income increased by 16.0% when compared to the same quarter one year prior, going from $3.55 million to $4.12 million.
- The revenue growth significantly trails the industry average of 44.2%. Since the same quarter one year prior, revenues slightly increased by 0.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The gross profit margin for EMAGIN CORP is rather high; currently it is at 53.30%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, EMAN's net profit margin of 49.80% significantly outperformed against the industry.
- After a year of stock price fluctuations, the net result is that EMAN's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.