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) -- Enphase Energy (Nasdaq: ENPH) has been upgraded by TheStreet Ratings from sell to hold. 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 and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and poor profit margins.
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- The revenue growth came in higher than the industry average of 5.8%. Since the same quarter one year prior, revenues rose by 16.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- ENPH's debt-to-equity ratio is very low at 0.22 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, ENPH has a quick ratio of 2.11, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for ENPHASE ENERGY INC is currently lower than what is desirable, coming in at 34.83%. Regardless of ENPH's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, ENPH's net profit margin of -4.19% significantly underperformed when compared to the industry average.
- Net operating cash flow has declined marginally to $7.58 million or 0.65% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, ENPHASE ENERGY INC has marginally lower results.