Logitech International S.A. Stock Upgraded (LOGI)

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) -- Logitech International S.A (Nasdaq: LOGI) 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, largely solid financial position with reasonable debt levels by most measures and increase in net income. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and a generally disappointing performance in the stock itself.

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Highlights from the ratings report include:
  • LOGI's revenue growth has slightly outpaced the industry average of 0.7%. Since the same quarter one year prior, revenues slightly increased by 2.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • LOGI 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 the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.11, which illustrates the ability to avoid short-term cash problems.
  • LOGITECH INTERNATIONAL SA 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, LOGITECH INTERNATIONAL SA swung to a loss, reporting -$1.42 versus $0.42 in the prior year. This year, the market expects an improvement in earnings ($0.28 versus -$1.42).
  • In its most recent trading session, LOGI has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Computers & Peripherals industry and the overall market, LOGITECH INTERNATIONAL SA's return on equity significantly trails that of both the industry average and the S&P 500.

Logitech International S.A. designs, manufactures, and markets hardware and software products that enable digital navigation, music and video entertainment, gaming, social networking, audio and video communication over the Internet, video security, and home-entertainment control. Logitech International S.A has a market cap of $1.32 billion and is part of the technology sector and computer hardware industry. Shares are up 10.1% year to date as of the close of trading on Monday.

You can view the full Logitech International S.A Ratings Report or get investment ideas from our investment research center.

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