NEW YORK ( TheStreet) -- Top Image Systems (Nasdaq: TISA) has been downgraded by TheStreet Ratings from buy to hold. 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 and notable return on equity. However, as a counter to these strengths, we find that the company's profit margins have been poor overall. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 1.4%. Since the same quarter one year prior, revenues rose by 25.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- TISA 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 the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.37, which illustrates the ability to avoid short-term cash problems.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Software industry. The net income increased by 155.4% when compared to the same quarter one year prior, rising from -$0.87 million to $0.48 million.
- The gross profit margin for TOP IMAGE SYSTEMS LTD is rather high; currently it is at 60.90%. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, TISA's net profit margin of 6.60% significantly trails the industry average.
-- Written by a member of TheStreet Ratings Staff