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) -- Imation Corporation (NYSE: IMN) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.
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- Powered by its strong earnings growth of 105.78% and other important driving factors, this stock has surged by 29.84% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Computers & Peripherals industry. The net income increased by 105.4% when compared to the same quarter one year prior, rising from -$310.20 million to $16.70 million.
- IMN, with its decline in revenue, underperformed when compared the industry average of 4.7%. Since the same quarter one year prior, revenues fell by 12.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Computers & Peripherals industry and the overall market, IMATION CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for IMATION CORP is currently lower than what is desirable, coming in at 26.03%. Regardless of IMN's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, IMN's net profit margin of 7.17% is significantly lower than the industry average.