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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 revenue growth, growth in earnings per share, increase in net income, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 6.4%. Since the same quarter one year prior, revenues slightly increased by 8.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- FIESTA RESTAURANT GROUP INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, FIESTA RESTAURANT GROUP INC increased its bottom line by earning $0.40 versus $0.36 in the prior year. This year, the market expects an improvement in earnings ($1.29 versus $0.40).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income increased by 81.7% when compared to the same quarter one year prior, rising from $4.80 million to $8.72 million.
- Net operating cash flow has significantly increased by 1120.26% to $6.90 million when compared to the same quarter last year. In addition, FIESTA RESTAURANT GROUP INC has also vastly surpassed the industry average cash flow growth rate of -78.91%.
- Powered by its strong earnings growth of 65.00% and other important driving factors, this stock has surged by 38.53% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
Fiesta Restaurant Group, Inc., through its subsidiaries, owns, operates, and franchises fast-casual restaurants. It operates its fast-casual restaurants under the Pollo Tropical and Taco Cabana brand names. Fiesta Restaurant Group has a market cap of $1.19 billion and is part of the services sector and leisure industry. Shares are down 14.5% year to date as of the close of trading on Tuesday.
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