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) -- MER Telemanagement Solutions (Nasdaq: MTSL) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in net income and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
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- Compared to its closing price of one year ago, MTSL's share price has jumped by 151.35%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, MTSL should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- Despite its growing revenue, the company underperformed as compared with the industry average of 12.7%. Since the same quarter one year prior, revenues rose by 12.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- MTSL 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. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.09, which illustrates the ability to avoid short-term cash problems.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Communications Equipment industry average. The net income increased by 8.4% when compared to the same quarter one year prior, going from $0.23 million to $0.25 million.
- MER TELEMGMT SOLUTIONS LTD reported flat earnings per share in the most recent quarter. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, MER TELEMGMT SOLUTIONS LTD increased its bottom line by earning $0.11 versus $0.04 in the prior year.
-- Written by a member of TheStreet Ratings Staff