NEW YORK ( TheStreet) -- X-Rite (Nasdaq: XRIT) 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, revenue growth, good cash flow from operations, expanding profit margins and solid stock price performance. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • X-RITE INC has shown improvement in its earnings for its most recently reported quarter when compared with the same quarter a year earlier. 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, X-RITE INC turned its bottom line around by earning $0.04 versus -$0.33 in the prior year. This year, the market expects an improvement in earnings ($0.27 versus $0.04).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electronic Equipment, Instruments & Components industry. The net income increased by 5363.1% when compared to the same quarter one year prior, rising from -$0.13 million to $7.00 million.
  • The revenue growth significantly trails the industry average of 44.8%. Since the same quarter one year prior, revenues slightly increased by 2.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has significantly increased by 185.11% to $15.61 million when compared to the same quarter last year. In addition, X-RITE INC has also vastly surpassed the industry average cash flow growth rate of -55.04%.
  • The gross profit margin for X-RITE INC is rather high; currently it is at 59.50%. Regardless of XRIT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, XRIT's net profit margin of 12.30% significantly outperformed against the industry.

X-Rite, Incorporated, a technology company, develops a range of color management systems primarily in the United States, Europe, and Asia. The company offers various management solutions comprising hardware, software, and services. The company has a P/E ratio of 50.8, below the average consumer durables industry P/E ratio of 53.6 and above the S&P 500 P/E ratio of 17.7. X-Rite has a market cap of $414.7 million and is part of the consumer goods sector and consumer durables industry. Shares are up 0.4% year to date as of the close of trading on Friday.

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