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) -- Dice Holdings (NYSE: DHX) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
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- Despite its growing revenue, the company underperformed as compared with the industry average of 21.3%. Since the same quarter one year prior, revenues rose by 20.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- DICE HOLDINGS INC's earnings per share declined by 33.3% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, DICE HOLDINGS INC reported lower earnings of $0.26 versus $0.59 in the prior year. This year, the market expects an improvement in earnings ($0.32 versus $0.26).
- The gross profit margin for DICE HOLDINGS INC is currently very high, coming in at 85.41%. Regardless of DHX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, DHX's net profit margin of 7.24% is significantly lower than the industry average.
- DHX's debt-to-equity ratio of 0.72 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that DHX's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.51 is low and demonstrates weak liquidity.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. When compared to other companies in the Internet Software & Services industry and the overall market, DICE HOLDINGS INC's return on equity is below that of both the industry average and the S&P 500.