NEW YORK ( TheStreet) -- Leapfrog (NYSE: LF) 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, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results. Highlights from the ratings report include:
- LF's revenue growth has slightly outpaced the industry average of 1.2%. Since the same quarter one year prior, revenues rose by 10.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- LF 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 2.69, which clearly demonstrates the ability to cover short-term cash needs.
- LEAPFROG ENTERPRISES INC has improved earnings per share by 28.9% 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. We feel that this trend should continue. During the past fiscal year, LEAPFROG ENTERPRISES INC increased its bottom line by earning $0.29 versus $0.05 in the prior year. This year, the market expects an improvement in earnings ($0.40 versus $0.29).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Leisure Equipment & Products industry average. The net income increased by 29.7% when compared to the same quarter one year prior, rising from $25.29 million to $32.81 million.
- Net operating cash flow has significantly increased by 13792.71% to $49.60 million when compared to the same quarter last year. In addition, LEAPFROG ENTERPRISES INC has also vastly surpassed the industry average cash flow growth rate of -16.95%.
-- Written by a member of TheStreet RatingsStaff