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) -- Informatica Corporation (Nasdaq: INFA) 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, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
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- INFA's revenue growth has slightly outpaced the industry average of 0.3%. Since the same quarter one year prior, revenues slightly increased by 3.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- INFA has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, INFA has a quick ratio of 1.91, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has increased to $60.09 million or 35.86% when compared to the same quarter last year. In addition, INFORMATICA CORP has also vastly surpassed the industry average cash flow growth rate of -25.87%.
- The gross profit margin for INFORMATICA CORP is currently very high, coming in at 86.80%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, INFA's net profit margin of 13.23% significantly trails the industry average.
- INFORMATICA CORP's earnings per share declined by 26.3% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, INFORMATICA CORP reported lower earnings of $0.84 versus $1.05 in the prior year. This year, the market expects an improvement in earnings ($1.42 versus $0.84).
-- Written by a member of TheStreet Ratings Staff