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) -- Audience (Nasdaq: ADNC) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.

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Highlights from the ratings report include:
  • ADNC 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 8.38, which clearly demonstrates the ability to cover short-term cash needs.
  • ADNC, with its decline in revenue, underperformed when compared the industry average of 2.7%. Since the same quarter one year prior, revenues fell by 13.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • AUDIENCE INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, AUDIENCE INC reported lower earnings of $0.09 versus $0.74 in the prior year. For the next year, the market is expecting a contraction of 266.7% in earnings (-$0.15 versus $0.09).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Electronic Equipment, Instruments & Components industry. The net income has significantly decreased by 172.5% when compared to the same quarter one year ago, falling from $3.44 million to -$2.49 million.

Audience, Inc. provides intelligent voice and audio solutions for mobile devices worldwide. Its platform consists of proprietary, purpose-built digital signal processors and audio codec, analog and mixed signal circuits, and algorithms for voice isolation and noise suppression. Audience has a market cap of $265.7 million and is part of the technology sector and electronics industry. Shares are up 4.3% year to date as of the close of trading on Monday.

You can view the full Audience Ratings Report or get investment ideas from our investment research center.

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