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) -- Net one Ueps Technologies (Nasdaq: UEPS) 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 good cash flow from operations. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.
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- UEPS's revenue growth has slightly outpaced the industry average of 6.0%. Since the same quarter one year prior, revenues slightly increased by 9.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 205.88% and other important driving factors, this stock has surged by 33.62% 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.
- NET one UEPS TECHNOLOGIES INC reported significant earnings per share improvement 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, NET one UEPS TECHNOLOGIES INC reported lower earnings of $0.29 versus $1.00 in the prior year. This year, the market expects an improvement in earnings ($1.25 versus $0.29).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Software industry average, but is greater than that of the S&P 500. The net income increased by 203.9% when compared to the same quarter one year prior, rising from -$7.98 million to $8.29 million.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison to the other companies in the Software industry and the overall market, NET one UEPS TECHNOLOGIES INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.