NEW YORK ( TheStreet) -- Perceptron (Nasdaq: PRCP) 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, increase in net income, expanding profit margins 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:
- PRCP's revenue growth has slightly outpaced the industry average of 4.8%. Since the same quarter one year prior, revenues slightly increased by 6.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- PRCP 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. Along with this, the company maintains a quick ratio of 2.79, which clearly demonstrates the ability to cover short-term cash needs.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electronic Equipment, Instruments & Components industry. The net income increased by 70.0% when compared to the same quarter one year prior, rising from $1.03 million to $1.75 million.
- 45.70% is the gross profit margin for PERCEPTRON INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 10.00% is above that of the industry average.
- PERCEPTRON 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, PERCEPTRON INC turned its bottom line around by earning $0.20 versus -$0.09 in the prior year. This year, the market expects earnings to be in line with last year ($0.20 versus $0.20).
-- Written by a member of TheStreet RatingsStaff