NEW YORK ( TheStreet) -- Rosetta Resources (Nasdaq: ROSE) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, robust revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. 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:
- ROSETTA RESOURCES INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. 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, ROSETTA RESOURCES INC turned its bottom line around by earning $0.37 versus -$4.30 in the prior year. This year, the market expects an improvement in earnings ($1.96 versus $0.37).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 261.0% when compared to the same quarter one year prior, rising from $8.85 million to $31.95 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 35.6%. Since the same quarter one year prior, revenues rose by 26.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.41, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.04, which illustrates the ability to avoid short-term cash problems.
- The gross profit margin for ROSETTA RESOURCES INC is currently very high, coming in at 79.00%. It has increased significantly from the same period last year. Along with this, the net profit margin of 31.60% significantly outperformed against the industry average.