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

)

-- Conn's

(Nasdaq:

CONN

) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, expanding profit margins, solid stock price performance and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

  • ACTIVE STOCK TRADERS: Check out TheStreet's special offer for Real Money, headlined by Jim Cramer, now!

Highlights from the ratings report include:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Specialty Retail industry. The net income increased by 162.6% when compared to the same quarter one year prior, rising from $4.40 million to $11.56 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 10.6%. Since the same quarter one year prior, revenues slightly increased by 4.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 46.40% is the gross profit margin for CONN'S INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 5.80% trails the industry average.
  • Powered by its strong earnings growth of 150.00% and other important driving factors, this stock has surged by 286.86% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • CONN'S INC reported significant earnings per share improvement in the most recent quarter compared to 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, CONN'S INC reported poor results of -$0.12 versus -$0.01 in the prior year. This year, the market expects an improvement in earnings ($1.41 versus -$0.12).

Conn's, Inc. engages in the specialty retail of durable consumer products in the United States. The company offers consumer electronics, including cameras; camcorders; video game hardware and software products; portable audio; 3D, LED, LCD, plasma, and DLP televisions; and home theater systems. The company has a P/E ratio of 243.7, below the average retail industry P/E ratio of 274.1 and above the S&P 500 P/E ratio of 17.7. Conn's has a market cap of $712.2 million and is part of the

services

sector and

retail

industry. Shares are up 104.2% year to date as of the close of trading on Thursday.

You can view the full

Conn's 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

null