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) -- EZCorp (Nasdaq: EZPW) 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, attractive valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
- EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.
- EZPW's revenue growth has slightly outpaced the industry average of 7.8%. Since the same quarter one year prior, revenues rose by 11.4%. 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.
- EZPW's debt-to-equity ratio is very low at 0.26 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, EZPW has a quick ratio of 2.43, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for EZCORP INC is rather high; currently it is at 68.40%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 11.08% is above that of the industry average.
- EZCORP INC's earnings per share declined by 24.4% 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, EZCORP INC increased its bottom line by earning $2.82 versus $2.43 in the prior year. For the next year, the market is expecting a contraction of 7.1% in earnings ($2.62 versus $2.82).
-- Written by a member of TheStreet Ratings Staff