NEW YORK ( TheStreet) -- Mistras Group (NYSE: MG) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow. Highlights from the ratings report include:
- MG's revenue growth has slightly outpaced the industry average of 24.8%. Since the same quarter one year prior, revenues rose by 28.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Although MG's debt-to-equity ratio of 0.22 is very low, it is currently higher than that of the industry average. To add to this, MG has a quick ratio of 1.76, which demonstrates the ability of the company to cover short-term liquidity needs.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 72.53% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, MG should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- MISTRAS GROUP 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. During the past fiscal year, MISTRAS GROUP INC increased its bottom line by earning $0.61 versus $0.39 in the prior year. This year, the market expects an improvement in earnings ($0.80 versus $0.61).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Professional Services industry average. The net income increased by 27.3% when compared to the same quarter one year prior, rising from $5.28 million to $6.72 million.