NEW YORK ( TheStreet) -- Perma-Fix Environmental Services (Nasdaq: PESI) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity. Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 1.6%. Since the same quarter one year prior, revenues rose by 43.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Although PESI's debt-to-equity ratio of 0.06 is very low, it is currently higher than that of the industry average. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.16, which illustrates the ability to avoid short-term cash problems.
- 37.90% is the gross profit margin for PERMA-FIX ENVIRONMENTAL SVCS which we consider to be strong. It has increased significantly from the same period last year. Along with this, the net profit margin of 18.30% significantly outperformed against the industry average.
- Net operating cash flow has significantly increased by 635.58% to $9.26 million when compared to the same quarter last year. In addition, PERMA-FIX ENVIRONMENTAL SVCS has also vastly surpassed the industry average cash flow growth rate of 2.29%.