Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model. NEW YORK ( TheStreet) -- support.com (Nasdaq: SPRT) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, robust revenue growth 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 return on equity has been disappointing.
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- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet Software & Services industry. The net income increased by 104.1% when compared to the same quarter one year prior, rising from -$7.11 million to $0.29 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 48.0%. Since the same quarter one year prior, revenues rose by 47.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- 47.60% is the gross profit margin for SUPPORT.COM INC which we consider to be strong. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, SPRT's net profit margin of 1.60% significantly trails the industry average.
- SUPPORT.COM INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. However, the consensus estimates suggest that there will be an upward trend in the coming year. During the past fiscal year, SUPPORT.COM INC reported poor results of -$0.39 versus -$0.38 in the prior year. This year, the market expects an improvement in earnings (-$0.07 versus -$0.39).
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Internet Software & Services industry and the overall market, SUPPORT.COM INC's return on equity significantly trails that of both the industry average and the S&P 500.
-- Written by a member of TheStreet Ratings Staff