NEW YORK ( TheStreet) -- Matrix Service Company (Nasdaq: MTRX) 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, growth in earnings per share, reasonable valuation levels and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
- ACTIVE STOCK TRADERS: Check out TheStreet's special offer for Real Money, headlined by Jim Cramer, now!
- The revenue growth came in higher than the industry average of 10.3%. Since the same quarter one year prior, revenues rose by 34.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- MTRX's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, MTRX has a quick ratio of 1.60, which demonstrates the ability of the company to cover short-term liquidity needs.
- MATRIX SERVICE CO has improved earnings per share by 5.5% 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 year. We feel that this trend should continue. During the past fiscal year, MATRIX SERVICE CO increased its bottom line by earning $0.71 versus $0.18 in the prior year. This year, the market expects an improvement in earnings ($0.78 versus $0.71).
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Energy Equipment & Services industry and the overall market, MATRIX SERVICE CO's return on equity is below that of both the industry average and the S&P 500.
-- Written by a member of TheStreet Ratings Staff