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) -- Sykes (Nasdaq: SYKE) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its 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 sub par growth in net income.
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- SYKE's debt-to-equity ratio is very low at 0.17 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.57, which clearly demonstrates the ability to cover short-term cash needs.
- SYKES ENTERPRISES INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SYKES ENTERPRISES INC increased its bottom line by earning $1.14 versus $0.56 in the prior year. This year, the market expects an improvement in earnings ($1.19 versus $1.14).
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 9.8%. Since the same quarter one year prior, revenues slightly dropped by 4.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- 39.00% is the gross profit margin for SYKES ENTERPRISES INC which we consider to be strong. Regardless of SYKE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SYKE's net profit margin of 2.90% is significantly lower than the industry average.
-- Written by a member of TheStreet Ratings Staff