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) -- Bridgeline Digital (Nasdaq: BLIN) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, feeble growth in the company's earnings per share and unimpressive growth in net income.
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- Compared to its closing price of one year ago, BLIN's share price has jumped by 250.26%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- Although BLIN's debt-to-equity ratio of 0.22 is very low, it is currently higher than that of the industry average. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.12, which illustrates the ability to avoid short-term cash problems.
- The gross profit margin for BRIDGELINE DIGITAL INC is rather high; currently it is at 55.70%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -4.30% is in-line with the industry average.
- BRIDGELINE DIGITAL INC reported flat earnings per share in the most recent quarter. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, BRIDGELINE DIGITAL INC reported poor results of -$0.06 versus -$0.03 in the prior year. For the next year, the market is expecting a contraction of 33.3% in earnings (-$0.08 versus -$0.06).
- Net operating cash flow has significantly decreased to -$0.83 million or 270.14% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
-- Written by a member of TheStreet Ratings Staff