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) -- Edgewater Technology (Nasdaq: EDGW) 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, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. 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 20.1%. Since the same quarter one year prior, revenues slightly increased by 5.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- EDGW 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, EDGW has a quick ratio of 2.22, which demonstrates the ability of the company to cover short-term liquidity needs.
- EDGEWATER TECHNOLOGY INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, EDGEWATER TECHNOLOGY INC increased its bottom line by earning $0.13 versus $0.02 in the prior year. This year, the market expects an improvement in earnings ($0.28 versus $0.13).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the IT Services industry. The net income increased by 123.5% when compared to the same quarter one year prior, rising from $0.79 million to $1.77 million.
- Net operating cash flow has slightly increased to $5.87 million or 8.26% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -18.86%.