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) -- Lannett Company (NYSE: LCI) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust 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 expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
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- LCI's very impressive revenue growth greatly exceeded the industry average of 3.8%. Since the same quarter one year prior, revenues leaped by 84.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- LCI's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 4.56, which clearly demonstrates the ability to cover short-term cash needs.
- LANNETT CO 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, LANNETT CO INC increased its bottom line by earning $0.46 versus $0.14 in the prior year. This year, the market expects an improvement in earnings ($1.45 versus $0.46).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Pharmaceuticals industry. The net income increased by 475.0% when compared to the same quarter one year prior, rising from $2.88 million to $16.57 million.
- The gross profit margin for LANNETT CO INC is rather high; currently it is at 60.96%. It has increased significantly from the same period last year. Along with this, the net profit margin of 24.60% is above that of the industry average.