Iteris Inc. Stock Upgraded (ITI)

NEW YORK ( TheStreet) -- Iteris (AMEX: ITI) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, compelling growth in net income, solid stock price performance and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 11.6%. Since the same quarter one year prior, revenues rose by 24.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • ITI's debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, ITI has a quick ratio of 2.24, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electronic Equipment, Instruments & Components industry. The net income increased by 110.6% when compared to the same quarter one year prior, rising from -$7.03 million to $0.75 million.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • ITERIS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ITERIS INC swung to a loss, reporting -$0.15 versus $0.06 in the prior year. This year, the market expects an improvement in earnings ($0.04 versus -$0.15).
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Iteris, Inc. provides intelligent transportation systems solutions primarily in the United States, Europe, and Asia. The company operates through four segments: Roadway Sensors, Vehicle Sensors, Transportation Systems, and Environmental Technology. The company has a P/E ratio of 37, above the average telecommunications industry P/E ratio of 18.5 and above the S&P 500 P/E ratio of 17.7. Iteris has a market cap of $50.5 million and is part of the technology sector and telecommunications industry. Shares are up 13.8% year to date as of the close of trading on Tuesday.

You can view the full Iteris Ratings Report or get investment ideas from our investment research center.
-- Written by a member of TheStreet RatingsStaff
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