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"We rate I D SYSTEMS INC (IDSY) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we find that the company's return on equity has been disappointing."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 5.7%. Since the same quarter one year prior, revenues rose by 21.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- IDSY's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, IDSY has a quick ratio of 1.83, which demonstrates the ability of the company to cover short-term liquidity needs.
- The net income growth from the same quarter one year ago has exceeded that of the Electronic Equipment, Instruments & Components industry average, but is less than that of the S&P 500. The net income increased by 0.1% when compared to the same quarter one year prior, going from -$1.71 million to -$1.71 million.
- 49.83% is the gross profit margin for I D SYSTEMS INC which we consider to be strong. Regardless of IDSY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, IDSY's net profit margin of -14.93% significantly underperformed when compared to the industry average.
- 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. Compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, I D SYSTEMS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: IDSY Ratings Report