NEW YORK ( TheStreet) -- Points International (Nasdaq: PCOM) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity and solid stock price performance. We feel these strengths outweigh the fact that the company shows low profit margins. Highlights from the ratings report include:
- POINTS INTERNATIONAL LTD has shown improvement in its earnings for its most recently reported quarter when compared with the same quarter a year earlier. The company has demonstrated a pattern of positive earnings per share growth over the past two years. During the past fiscal year, POINTS INTERNATIONAL LTD increased its bottom line by earning $0.26 versus $0.10 in the prior year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet Software & Services industry. The net income increased by 537.1% when compared to the same quarter one year prior, rising from $0.32 million to $2.06 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 24.7%. Since the same quarter one year prior, revenues rose by 21.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- PCOM 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 1.12, which illustrates the ability to avoid short-term cash problems.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Internet Software & Services industry and the overall market, POINTS INTERNATIONAL LTD's return on equity exceeds that of both the industry average and the S&P 500.
-- Written by a member of TheStreet RatingsStaff