NEW YORK ( TheStreet) -- GlobalSCAPE Incorporated (AMEX: GSB) 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, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself. Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet Software & Services industry. The net income increased by 161.1% when compared to the same quarter one year prior, rising from $0.23 million to $0.61 million.
- GSB's revenue growth trails the industry average of 32.7%. Since the same quarter one year prior, revenues rose by 13.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- GSB 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. To add to this, GSB has a quick ratio of 2.38, which demonstrates the ability of the company to cover short-term liquidity needs.
- GLOBALSCAPE 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, GLOBALSCAPE INC reported lower earnings of $0.05 versus $0.08 in the prior year. This year, the market expects an improvement in earnings ($0.08 versus $0.05).