NEW YORK ( TheStreet) -- HNI Corporation (NYSE: HNI) 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, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • HNI's revenue growth has slightly outpaced the industry average of 0.7%. Since the same quarter one year prior, revenues slightly increased by 9.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • HNI 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 year. We feel that this trend should continue. During the past fiscal year, HNI CORP turned its bottom line around by earning $0.64 versus -$0.05 in the prior year. This year, the market expects an improvement in earnings ($1.04 versus $0.64).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Services & Supplies industry. The net income increased by 59.1% when compared to the same quarter one year prior, rising from $15.68 million to $24.95 million.
  • Net operating cash flow has significantly increased by 58.33% to $75.33 million when compared to the same quarter last year. In addition, HNI CORP has also vastly surpassed the industry average cash flow growth rate of -1.77%.
  • 35.60% is the gross profit margin for HNI CORP which we consider to be strong. Regardless of HNI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 4.90% trails the industry average.

HNI Corporation and its subsidiaries engage in designing, manufacturing, and marketing office furniture and hearth products primarily in the United States, Canada, China, Hong Kong, and Taiwan. The company has a P/E ratio of 26.3, equal to the average consumer durables industry P/E ratio and above the S&P 500 P/E ratio of 17.7. HNI has a market cap of $1 billion and is part of the consumer goods sector and consumer durables industry. Shares are down 25% year to date as of the close of trading on Tuesday.

You can view the full HNI Ratings Report or get investment ideas from our investment research center.
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