NEW YORK ( TheStreet) -- Kona Grill (Nasdaq: KONA) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins. Highlights from the ratings report include:
- This stock has managed to rise its share value by 47.14% over the past twelve months. Regarding the stock's future course, although almost any stock can fall in a broad market decline, KONA should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- KONA GRILL INC 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. We feel that this trend should continue. During the past fiscal year, KONA GRILL INC turned its bottom line around by earning $0.25 versus -$0.12 in the prior year. This year, the market expects an improvement in earnings ($0.39 versus $0.25).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income increased by 1387.0% when compared to the same quarter one year prior, rising from -$0.09 million to $1.18 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 9.2%. Since the same quarter one year prior, revenues slightly increased by 8.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- KONA 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.
-- Written by a member of TheStreet RatingsStaff