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) -- PowerSecure International (Nasdaq: POWR) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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- The revenue growth came in higher than the industry average of 0.7%. Since the same quarter one year prior, revenues rose by 20.9%. 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.
- POWR's debt-to-equity ratio is very low at 0.05 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, POWR has a quick ratio of 2.44, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has significantly increased by 66.38% to $1.95 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 46.32%.
- Compared to its closing price of one year ago, POWR's share price has jumped by 84.10%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- POWERSECURE INTL INC's earnings per share declined by 40.0% 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, POWERSECURE INTL INC increased its bottom line by earning $1.03 versus $0.05 in the prior year. For the next year, the market is expecting a contraction of 51.0% in earnings ($0.51 versus $1.03).
-- Written by a member of TheStreet Ratings Staff