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) -- PRGX Global (Nasdaq: PRGX) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in net income, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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- The revenue growth came in higher than the industry average of 11.8%. Since the same quarter one year prior, revenues slightly increased by 0.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- PRGX's debt-to-equity ratio is very low at 0.10 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.32, which illustrates the ability to avoid short-term cash problems.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the IT Services industry. The net income increased by 507.8% when compared to the same quarter one year prior, rising from $0.42 million to $2.57 million.
- Net operating cash flow has significantly increased by 349.02% to $11.50 million when compared to the same quarter last year. In addition, PRGX GLOBAL INC has also vastly surpassed the industry average cash flow growth rate of -88.51%.
- 37.70% is the gross profit margin for PRGX GLOBAL INC which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, PRGX's net profit margin of 4.92% significantly trails the industry average.
-- Written by a member of TheStreet Ratings Staff