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) -- Dell (Nasdaq: DELL) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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- Net operating cash flow has significantly increased by 57.81% to $1,343.00 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 34.10%.
- DELL, with its decline in revenue, underperformed when compared the industry average of 17.9%. Since the same quarter one year prior, revenues fell by 10.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- DELL's debt-to-equity ratio of 0.89 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.94 is weak.
- DELL INC's earnings per share declined by 44.9% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, DELL INC increased its bottom line by earning $1.89 versus $1.35 in the prior year. For the next year, the market is expecting a contraction of 10.1% in earnings ($1.70 versus $1.89).
-- Written by a member of TheStreet Ratings Staff