NEW YORK ( TheStreet) -- Lionbridge Technologies (Nasdaq: LIOX) has been upgraded by TheStreet Ratings from sell to hold. 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 and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor profit margins. Highlights from the ratings report include:
- LIOX's revenue growth has slightly outpaced the industry average of 0.8%. Since the same quarter one year prior, revenues slightly increased by 7.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The current debt-to-equity ratio, 0.48, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, LIOX has a quick ratio of 1.54, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for LIONBRIDGE TECHNOLOGIES INC is currently lower than what is desirable, coming in at 32.90%. Regardless of LIOX's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, LIOX's net profit margin of 2.80% is significantly lower than the same period one year prior.
- LIOX's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 29.20%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
-- Written by a member of TheStreet RatingsStaff