NEW YORK ( TheStreet) -- Capital Senior Living Corporation (NYSE: CSU) 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, impressive record of earnings per share growth, compelling growth in net income, solid stock price performance and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow. Highlights from the ratings report include:
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Health Care Providers & Services industry and the overall market, CAPITAL SENIOR LIVING CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- Powered by its strong earnings growth of 100.00% and other important driving factors, this stock has surged by 89.66% 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.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Providers & Services industry. The net income increased by 109.2% when compared to the same quarter one year prior, rising from $0.76 million to $1.59 million.
- CAPITAL SENIOR LIVING CORP 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, CAPITAL SENIOR LIVING CORP increased its bottom line by earning $0.16 versus $0.11 in the prior year. This year, the market expects an improvement in earnings ($0.30 versus $0.16).
- The revenue growth came in higher than the industry average of 7.0%. Since the same quarter one year prior, revenues rose by 29.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.