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) -- Harris Interactive (Nasdaq: HPOL) 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, notable return on equity and expanding profit margins. However, as a counter to these strengths, we find that revenues have generally been declining.
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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 Media industry. The net income increased by 129.3% when compared to the same quarter one year prior, rising from -$5.96 million to $1.74 million.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Media industry and the overall market, HARRIS INTERACTIVE INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The current debt-to-equity ratio, 0.54, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.92 is somewhat weak and could be cause for future problems.
- The revenue fell significantly faster than the industry average of 19.4%. Since the same quarter one year prior, revenues fell by 12.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- Powered by its strong earnings growth of 137.50% and other important driving factors, this stock has surged by 112.85% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
-- Written by a member of TheStreet Ratings Staff