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 solid stock price performance, growth in earnings per share, compelling growth in net income, revenue growth and attractive valuation levels. We feel these strengths outweigh the fact that the company shows low profit margins.
Highlights from the ratings report include:
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- LUBYS 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, LUBYS INC turned its bottom line around by earning $0.09 versus -$0.03 in the prior year. This year, the market expects an improvement in earnings ($0.16 versus $0.09).
- 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 51.6% when compared to the same quarter one year prior, rising from $0.72 million to $1.09 million.
- LUB's revenue growth trails the industry average of 13.9%. Since the same quarter one year prior, revenues slightly increased by 3.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
Luby's, Inc., together with its subsidiaries, engages in the ownership and operation of restaurants. It also offers culinary contract services comprising contract arrangements to manage food services for clients operating in healthcare, higher education, and corporate dining businesses. The company has a P/E ratio of 31.9, above the average leisure industry P/E ratio of 26.8 and above the S&P 500 P/E ratio of 17.7. Luby's has a market cap of $143.4 million and is part of the
industry. Shares are up 27.3% year to date as of the close of trading on Thursday.
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-- Written by a member of TheStreet RatingsStaff