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Spirit AeroSystems Holdings Inc. Stock Upgraded (SPR)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- Spirit AeroSystems Holdings (NYSE: SPR) 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, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

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Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 3.6%. Since the same quarter one year prior, revenues rose by 16.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has significantly increased by 140.38% to $308.90 million when compared to the same quarter last year. In addition, SPIRIT AEROSYSTEMS HOLDINGS has also vastly surpassed the industry average cash flow growth rate of -3.23%.
  • The current debt-to-equity ratio, 0.59, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.81 is somewhat weak and could be cause for future problems.
  • SPIRIT AEROSYSTEMS HOLDINGS'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, SPIRIT AEROSYSTEMS HOLDINGS reported lower earnings of $0.25 versus $1.34 in the prior year. This year, the market expects an improvement in earnings ($2.00 versus $0.25).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Aerospace & Defense industry average, but is greater than that of the S&P 500. The net income increased by 0.5% when compared to the same quarter one year prior, going from $60.40 million to $60.70 million.
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Spirit AeroSystems Holdings, Inc., through its subsidiaries, operates as a non-original equipment manufacturer (OEM) that designs and manufactures commercial aerostructures worldwide. It operates in three segments: Fuselage Systems, Propulsion Systems, and Wing Systems. The company has a P/E ratio of 80.8, above the S&P 500 P/E ratio of 17.7. Spirit AeroSystems has a market cap of $2.29 billion and is part of the industrial goods sector and aerospace/defense industry. Shares are up 16.1% year to date as of the close of trading on Thursday.

You can view the full Spirit AeroSystems Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

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