NEW YORK ( TheStreet) -- DTS (Nasdaq: DTSI) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself. Highlights from the ratings report include:
- DTSI 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 12.31, which clearly demonstrates the ability to cover short-term cash needs.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market on the basis of return on equity, DTS INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- DTS INC's earnings per share declined by 10.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, DTS INC increased its bottom line by earning $0.84 versus $0.60 in the prior year. This year, the market expects an improvement in earnings ($1.37 versus $0.84).
- DTSI, with its decline in revenue, slightly underperformed the industry average of 5.5%. Since the same quarter one year prior, revenues slightly dropped by 2.4%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The change in net income from the same quarter one year ago has significantly exceeded that of the Electronic Equipment, Instruments & Components industry average, but is less than that of the S&P 500. The net income has decreased by 14.8% when compared to the same quarter one year ago, dropping from $3.41 million to $2.90 million.
-- Written by a member of TheStreet RatingsStaff