NEW YORK ( TheStreet) -- National American University Holdings (Nasdaq: NAUH) 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, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and disappointing return on equity. Highlights from the ratings report include:
- NAUH's revenue growth has slightly outpaced the industry average of 3.5%. Since the same quarter one year prior, revenues slightly increased by 9.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- NAUH has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.83, which clearly demonstrates the ability to cover short-term cash needs.
- NATIONAL AMERN UNIV HLDG INC's earnings per share declined by 20.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, NATIONAL AMERN UNIV HLDG INC increased its bottom line by earning $0.38 versus $0.36 in the prior year. This year, the market expects an improvement in earnings ($0.44 versus $0.38).
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Diversified Consumer Services industry and the overall market on the basis of return on equity, NATIONAL AMERN UNIV HLDG INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Diversified Consumer Services industry. The net income has decreased by 23.6% when compared to the same quarter one year ago, dropping from $1.34 million to $1.02 million.