NEW YORK ( TheStreet) -- VirtualScopics (Nasdaq: VSCP) 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, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year. 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 Life Sciences Tools & Services industry. The net income increased by 100.8% when compared to the same quarter one year prior, rising from -$1.61 million to $0.01 million.
- VSCP 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 3.75, which clearly demonstrates the ability to cover short-term cash needs.
- VIRTUALSCOPICS 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 year. During the past fiscal year, VIRTUALSCOPICS INC turned its bottom line around by earning $0.02 versus -$0.03 in the prior year.
- 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 Life Sciences Tools & Services industry and the overall market, VIRTUALSCOPICS INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- VSCP'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 53.97%, 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