NEW YORK ( TheStreet) -- Benihana (Nasdaq: BNHN) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including poor profit margins and weak operating cash flow. Highlights from the ratings report include:
- BNHN's revenue growth has slightly outpaced the industry average of 4.9%. Since the same quarter one year prior, revenues slightly increased by 5.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- BENIHANA INC has improved earnings per share by 25.0% 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. This trend suggests that the performance of the business is improving. During the past fiscal year, BENIHANA INC turned its bottom line around by earning $0.01 versus -$0.65 in the prior year. This year, the market expects an improvement in earnings ($0.40 versus $0.01).
- The net income growth from the same quarter one year ago has exceeded that of the Hotels, Restaurants & Leisure industry average, but is less than that of the S&P 500. The net income increased by 21.1% when compared to the same quarter one year prior, going from $1.61 million to $1.95 million.
- The gross profit margin for BENIHANA INC is rather low; currently it is at 18.30%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.80% significantly trails the industry average.
- Net operating cash flow has decreased to $7.60 million or 22.70% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.