NEW YORK ( TheStreet) -- Grupo Aeroportuario del Centro Norte S.A.B (Nasdaq: OMAB) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and compelling growth in net income. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall. Highlights from the ratings report include:
- OMAB's very impressive revenue growth greatly exceeded the industry average of 10.0%. Since the same quarter one year prior, revenues leaped by 52.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- 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, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
- OMAB's debt-to-equity ratio is very low at 0.21 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.75 is somewhat weak and could be cause for future problems.
- GRUPO AEROPORTUARIO DEL CENT 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, GRUPO AEROPORTUARIO DEL CENT increased its bottom line by earning $0.90 versus $0.72 in the prior year. For the next year, the market is expecting a contraction of 6.7% in earnings ($0.84 versus $0.90).
- Net operating cash flow has decreased to $14.04 million or 10.70% 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.