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) -- MeetMe (AMEX: MEET) 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, increase in net income and revenue growth. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and poor profit margins.
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- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet Software & Services industry. The net income increased by 100.8% when compared to the same quarter one year prior, rising from -$2.02 million to $0.02 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 16.4%. Since the same quarter one year prior, revenues rose by 12.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- MEETME 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, MEETME INC reported poor results of -$0.29 versus -$0.18 in the prior year. This year, the market expects an improvement in earnings (-$0.02 versus -$0.29).
- The gross profit margin for MEETME INC is currently extremely low, coming in at 10.68%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, MEET's net profit margin of 0.12% is significantly lower than the industry average.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Internet Software & Services industry and the overall market, MEETME INC's return on equity significantly trails that of both the industry average and the S&P 500.