Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. NEW YORK ( TheStreet) -- StarTek (NYSE: SRT) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.
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- The revenue growth greatly exceeded the industry average of 15.2%. Since the same quarter one year prior, revenues rose by 25.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 71.42% and other important driving factors, this stock has surged by 112.02% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the IT Services industry and the overall market, STARTEK INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for STARTEK INC is rather low; currently it is at 15.72%. Regardless of SRT's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, SRT's net profit margin of -2.28% significantly underperformed when compared to the industry average.