NEW YORK ( TheStreet) -- SodaStream International (Nasdaq: SODA) 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, notable return on equity, solid stock price performance and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.
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- The revenue growth greatly exceeded the industry average of 11.1%. Since the same quarter one year prior, revenues rose by 33.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- SODA'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 the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.19, which illustrates the ability to avoid short-term cash problems.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Household Durables industry and the overall market, SODASTREAM INTERNATIONAL LTD's return on equity exceeds that of both the industry average and the S&P 500.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 71.78% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, SODA should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- SODASTREAM INTERNATIONAL LTD has improved earnings per share by 18.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, SODASTREAM INTERNATIONAL LTD increased its bottom line by earning $2.09 versus $1.34 in the prior year. This year, the market expects an improvement in earnings ($2.50 versus $2.09).