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) -- Epiq Systems (Nasdaq: EPIQ) 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, reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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- EPIQ's revenue growth has slightly outpaced the industry average of 5.9%. Since the same quarter one year prior, revenues rose by 15.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- EPIQ's debt-to-equity ratio of 0.73 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that EPIQ's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.47 is high and demonstrates strong liquidity.
- EPIQ SYSTEMS INC's earnings per share declined by 42.9% 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, EPIQ SYSTEMS INC increased its bottom line by earning $0.62 versus $0.33 in the prior year. This year, the market expects an improvement in earnings ($1.02 versus $0.62).
- 49.19% is the gross profit margin for EPIQ SYSTEMS INC which we consider to be strong. Regardless of EPIQ's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, EPIQ's net profit margin of 2.50% is significantly lower than the industry average.