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) -- Nova Measuring Instruments (Nasdaq: NVMI) 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, solid stock price performance and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.
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- The revenue growth came in higher than the industry average of 9.8%. Since the same quarter one year prior, revenues slightly increased by 5.5%. 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.
- NVMI 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 4.99, which clearly demonstrates the ability to cover short-term cash needs.
- Compared to its closing price of one year ago, NVMI's share price has jumped by 42.60%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, NVMI should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The gross profit margin for NOVA MEASURING INSTRUMENTS is rather high; currently it is at 54.35%. Regardless of NVMI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NVMI's net profit margin of 8.69% is significantly lower than the industry average.
- Net operating cash flow has decreased to $3.26 million or 23.60% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.