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) -- MKS Instruments (Nasdaq: MKSI) 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, increase in net income, expanding profit margins and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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- MKSI's very impressive revenue growth greatly exceeded the industry average of 4.8%. Since the same quarter one year prior, revenues leaped by 52.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- MKSI 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 5.50, which clearly demonstrates the ability to cover short-term cash needs.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 392.5% when compared to the same quarter one year prior, rising from $4.11 million to $20.24 million.
- 42.60% is the gross profit margin for MKS INSTRUMENTS INC which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, MKSI's net profit margin of 9.90% significantly trails the industry average.
- MKS INSTRUMENTS 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, MKS INSTRUMENTS INC reported lower earnings of $0.68 versus $0.91 in the prior year. This year, the market expects an improvement in earnings ($1.51 versus $0.68).