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) -- Thoratec Corporation (Nasdaq: THOR) 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, increase in net income, growth in earnings per share and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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- The revenue growth came in higher than the industry average of 1.5%. Since the same quarter one year prior, revenues slightly increased by 10.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- THOR 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. Along with this, the company maintains a quick ratio of 5.99, which clearly demonstrates the ability to cover short-term cash needs.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Health Care Equipment & Supplies industry average. The net income increased by 11.4% when compared to the same quarter one year prior, going from $20.81 million to $23.19 million.
- THORATEC CORP has improved earnings per share by 14.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, THORATEC CORP reported lower earnings of $0.94 versus $1.19 in the prior year. This year, the market expects an improvement in earnings ($1.75 versus $0.94).
- The gross profit margin for THORATEC CORP is currently very high, coming in at 72.16%. Regardless of THOR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, THOR's net profit margin of 17.77% compares favorably to the industry average.