NEW YORK ( TheStreet) -- Helios & Matheson Information Technology In (Nasdaq: HMNY) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and largely solid financial position with reasonable debt levels by most measures. 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:
- HELIOS & MATHESON INFO TECH 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 two years. During the past fiscal year, HELIOS & MATHESON INFO TECH turned its bottom line around by earning $0.10 versus -$0.73 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 IT Services industry. The net income increased by 248.4% when compared to the same quarter one year prior, rising from -$0.16 million to $0.24 million.
- HMNY, with its decline in revenue, underperformed when compared the industry average of 0.0%. Since the same quarter one year prior, revenues fell by 17.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- Powered by its strong earnings growth of 246.66% and other important driving factors, this stock has surged by 110.60% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
- The gross profit margin for HELIOS & MATHESON INFO TECH is currently lower than what is desirable, coming in at 25.80%. Regardless of HMNY's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 8.40% trails the industry average.
-- Written by a member of TheStreet RatingsStaff