NEW YORK ( TheStreet) -- Numerex (Nasdaq: NMRX) 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, reasonable 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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- NMRX's revenue growth has slightly outpaced the industry average of 14.6%. Since the same quarter one year prior, revenues rose by 15.1%. 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.
- NMRX's debt-to-equity ratio is very low at 0.03 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 3.04, which clearly demonstrates the ability to cover short-term cash needs.
- Net operating cash flow has significantly increased by 110.61% to $0.06 million when compared to the same quarter last year. In addition, NUMEREX CORP has also vastly surpassed the industry average cash flow growth rate of 10.19%.
- 43.25% is the gross profit margin for NUMEREX CORP which we consider to be strong. Regardless of NMRX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NMRX's net profit margin of 0.06% is significantly lower than the industry average.