NEW YORK ( TheStreet) -- HiSoft Technology International (Nasdaq: HSFT) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. 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:
- HSFT's very impressive revenue growth greatly exceeded the industry average of 0.2%. Since the same quarter one year prior, revenues leaped by 52.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- HISOFT TECHNOLOGY INTL -ADR 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. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, HISOFT TECHNOLOGY INTL -ADR increased its bottom line by earning $0.57 versus $0.32 in the prior year. This year, the market expects an improvement in earnings ($1.15 versus $0.57).
- 39.90% is the gross profit margin for HISOFT TECHNOLOGY INTL -ADR which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 10.50% trails the industry average.
- In comparison to the other companies in the IT Services industry and the overall market, HISOFT TECHNOLOGY INTL -ADR's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- HSFT has underperformed the S&P 500 Index, declining 20.95% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
-- Written by a member of TheStreet RatingsStaff