NEW YORK (TheStreet) -- CEC Entertainment (NYSE:CEC) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its notable return on equity, attractive valuation levels, good cash flow from operations, expanding profit margins and growth in earnings per share. We feel these strengths outweigh the fact that the company has had sub par growth in net income. Highlights from the ratings report include:
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, CEC ENTERTAINMENT INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- Net operating cash flow has increased to $43.19 million or 17.14% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 0.47%.
- 40.90% is the gross profit margin for CEC ENTERTAINMENT INC which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, CEC's net profit margin of 5.80% significantly trails the industry average.
- CEC ENTERTAINMENT INC's earnings per share improvement from the most recent quarter was slightly positive. 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, CEC ENTERTAINMENT INC reported lower earnings of $2.49 versus $2.66 in the prior year. This year, the market expects an improvement in earnings ($2.86 versus $2.49).
Latest Headlines about CEC
Latest from TheStreet Wire
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV