NEW YORK ( TheStreet) -- KVH Industries (Nasdaq: KVHI) 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, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
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- The revenue growth greatly exceeded the industry average of 14.6%. Since the same quarter one year prior, revenues rose by 49.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- KVHI's debt-to-equity ratio is very low at 0.14 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 3.50, which clearly demonstrates the ability to cover short-term cash needs.
- KVH INDUSTRIES INC reported significant earnings per share improvement 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 year. We feel that this trend should continue. During the past fiscal year, KVH INDUSTRIES INC increased its bottom line by earning $0.24 versus $0.06 in the prior year. This year, the market expects an improvement in earnings ($0.41 versus $0.24).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Communications Equipment industry. The net income increased by 242.8% when compared to the same quarter one year prior, rising from -$1.38 million to $1.96 million.
- 42.56% is the gross profit margin for KVH INDUSTRIES INC which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, KVHI's net profit margin of 4.91% significantly trails the industry average.