NEW YORK ( TheStreet) -- Shutterfly (Nasdaq: SFLY) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in net income, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself. Highlights from the ratings report include:
- SFLY's very impressive revenue growth greatly exceeded the industry average of 25.0%. Since the same quarter one year prior, revenues leaped by 58.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- SFLY 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. To add to this, SFLY has a quick ratio of 2.39, which demonstrates the ability of the company to cover short-term liquidity needs.
- The net income growth from the same quarter one year ago has significantly exceeded that of the Internet & Catalog Retail industry average, but is less than that of the S&P 500. The net income increased by 8.9% when compared to the same quarter one year prior, going from $32.51 million to $35.41 million.
- Net operating cash flow has increased to $122.84 million or 30.60% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 15.38%.
- The gross profit margin for SHUTTERFLY INC is rather high; currently it is at 62.60%. Regardless of SFLY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SFLY's net profit margin of 13.40% significantly outperformed against the industry.
-- Written by a member of TheStreet RatingsStaff