NEW YORK ( TheStreet) -- Interval Leisure Group (Nasdaq: IILG) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, reasonable valuation levels, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally poor debt management on most measures that we evaluated. Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry average. The net income increased by 23.1% when compared to the same quarter one year prior, going from $9.29 million to $11.43 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 9.2%. Since the same quarter one year prior, revenues slightly increased by 6.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Net operating cash flow has significantly increased by 62.20% to $20.09 million when compared to the same quarter last year. In addition, INTERVAL LEISURE GROUP has also vastly surpassed the industry average cash flow growth rate of -85.39%.
- The gross profit margin for INTERVAL LEISURE GROUP is rather high; currently it is at 67.50%. Regardless of IILG'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 10.70% trails the industry average.