NEW YORK ( TheStreet) -- Interphase (Nasdaq: INPH) 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, robust revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the growth in the company's earnings per share has not been good. 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 Computers & Peripherals industry. The net income increased by 101.4% when compared to the same quarter one year prior, rising from -$4.29 million to $0.06 million.
- INPH's revenue growth trails the industry average of 38.1%. Since the same quarter one year prior, revenues rose by 15.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- 49.50% is the gross profit margin for INTERPHASE CORP which we consider to be strong. Regardless of INPH's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, INPH's net profit margin of 1.10% is significantly lower than the same period one year prior.
- Powered by its strong earnings growth of 101.58% and other important driving factors, this stock has surged by 158.24% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. In comparison to the other companies in the Computers & Peripherals industry and the overall market, INTERPHASE CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.