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) -- Planet Payment (Nasdaq: PLPM) 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, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and a generally disappointing performance in the stock itself.
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- PLPM's debt-to-equity ratio is very low at 0.05 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, PLPM has a quick ratio of 1.99, which demonstrates the ability of the company to cover short-term liquidity needs.
- PLANET PAYMENT 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. 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, PLANET PAYMENT INC continued to lose money by earning -$0.01 versus -$0.10 in the prior year. This year, the market expects an improvement in earnings ($0.06 versus -$0.01).
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 16.6%. Since the same quarter one year prior, revenues slightly dropped by 7.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- 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 IT Services industry. The net income has significantly decreased by 309.4% when compared to the same quarter one year ago, falling from $0.37 million to -$0.78 million.
- Net operating cash flow has significantly decreased to -$0.63 million or 714.28% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.