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) -- National Instruments (Nasdaq: NATI) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, expanding profit margins, increase in stock price during the past year and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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- NATI 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 2.54, which clearly demonstrates the ability to cover short-term cash needs.
- Net operating cash flow has significantly increased by 125.28% to $46.14 million when compared to the same quarter last year. In addition, NATIONAL INSTRUMENTS CORP has also vastly surpassed the industry average cash flow growth rate of 72.03%.
- The gross profit margin for NATIONAL INSTRUMENTS CORP is currently very high, coming in at 80.94%. Regardless of NATI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NATI's net profit margin of 6.57% compares favorably to the industry average.
- NATIONAL INSTRUMENTS CORP reported flat earnings per share in the most recent quarter. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, NATIONAL INSTRUMENTS CORP reported lower earnings of $0.65 versus $0.74 in the prior year. This year, the market expects an improvement in earnings ($0.80 versus $0.65).
- NATI, with its decline in revenue, slightly underperformed the industry average of 9.3%. Since the same quarter one year prior, revenues slightly dropped by 0.6%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.