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 (
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, good cash flow from operations, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
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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 Professional Services industry. The net income increased by 75.1% when compared to the same quarter one year prior, rising from $7.18 million to $12.58 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 15.9%. Since the same quarter one year prior, revenues rose by 10.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Net operating cash flow has increased to $53.71 million or 19.80% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -1.06%.
- The gross profit margin for CORPORATE EXECUTIVE BRD CO is rather high; currently it is at 64.96%. 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 5.60% trails the industry average.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, the stock's 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 the other strengths this company displays justify these higher price levels.
The Corporate Executive Board Company provides member-based advisory services, talent measurement assessments, and management solutions to executives and professionals in the United States, Europe, and internationally. The company operates in two segments, CEB and SHL. Corporate Executive Board has a market cap of $2.28 billion and is part of the services sector and diversified services industry. Shares are down 7.3% year to date as of the close of trading on Thursday.
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