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, compelling growth in net income and increase in stock price during the past year. 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 10.4%. 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.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Transportation Infrastructure industry. The net income increased by 77.8% when compared to the same quarter one year prior, rising from $6.33 million to $11.25 million.
- After a year of stock price fluctuations, the net result is that OMAB's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. 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.
- 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 1.1% in earnings ($0.89 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.