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) -- MGC Diagnostics (Nasdaq: MGCD) 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, compelling growth in net income, good cash flow from operations and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
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- The revenue growth came in higher than the industry average of 1.0%. Since the same quarter one year prior, revenues rose by 15.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- MGCD has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, MGCD has a quick ratio of 2.41, which demonstrates the ability of the company to cover short-term liquidity needs.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Equipment & Supplies industry. The net income increased by 590.2% when compared to the same quarter one year prior, rising from -$0.13 million to $0.65 million.
- Net operating cash flow has significantly increased by 315.74% to $0.78 million when compared to the same quarter last year. In addition, MGC DIAGNOSTICS CORP has also vastly surpassed the industry average cash flow growth rate of -37.38%.
- The gross profit margin for MGC DIAGNOSTICS CORP is rather high; currently it is at 56.57%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 8.22% trails the industry average.