NEW YORK ( TheStreet) -- Anaren (Nasdaq: ANEN) 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, reasonable valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income. Highlights from the ratings report include:
- ANEN 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 4.93, which clearly demonstrates the ability to cover short-term cash needs.
- 37.30% is the gross profit margin for ANAREN INC which we consider to be strong. Regardless of ANEN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ANEN's net profit margin of 3.30% is significantly lower than the same period one year prior.
- The revenue fell significantly faster than the industry average of 17.9%. Since the same quarter one year prior, revenues fell by 17.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- ANAREN INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, ANAREN INC increased its bottom line by earning $1.12 versus $0.94 in the prior year. For the next year, the market is expecting a contraction of 33.5% in earnings ($0.75 versus $1.12).
-- Written by a member of TheStreet RatingsStaff