NEW YORK ( TheStreet) -- Procera Networks (Nasdaq: PKT) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value. Highlights from the ratings report include:
- PKT's very impressive revenue growth greatly exceeded the industry average of 21.8%. Since the same quarter one year prior, revenues leaped by 78.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- PKT 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 4.10, which clearly demonstrates the ability to cover short-term cash needs.
- PROCERA NETWORKS INC 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. We feel that this trend should continue. During the past fiscal year, PROCERA NETWORKS INC turned its bottom line around by earning $0.25 versus -$0.40 in the prior year. This year, the market expects an improvement in earnings ($0.42 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 Communications Equipment industry. The net income increased by 351.7% when compared to the same quarter one year prior, rising from -$0.23 million to $0.58 million.
- Net operating cash flow has significantly increased by 52.33% to $3.65 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 11.70%.
-- Written by a member of TheStreet Ratings Staff