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) -- II-VI (Nasdaq: IIVI) 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, reasonable valuation levels, expanding profit margins and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
- 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.
- IIVI's revenue growth has slightly outpaced the industry average of 6.4%. Since the same quarter one year prior, revenues slightly increased by 9.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- IIVI's debt-to-equity ratio is very low at 0.19 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 3.20, which clearly demonstrates the ability to cover short-term cash needs.
- 42.50% is the gross profit margin for II-VI INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 10.93% is above that of the industry average.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Electrical Equipment industry average. The net income increased by 13.4% when compared to the same quarter one year prior, going from $13.99 million to $15.87 million.
-- Written by a member of TheStreet Ratings Staff