NEW YORK ( TheStreet) -- Melco Crown Entertainment (Nasdaq: MPEL) 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, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and attractive valuation levels. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 10.0%. Since the same quarter one year prior, revenues rose by 45.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 600.00% and other important driving factors, this stock has surged by 46.78% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, MPEL should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • MELCO CROWN ENTMT LTD -ADR 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, MELCO CROWN ENTMT LTD -ADR continued to lose money by earning -$0.02 versus -$0.63 in the prior year. This year, the market expects an improvement in earnings ($0.39 versus -$0.02).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income increased by 618.1% when compared to the same quarter one year prior, rising from $15.78 million to $113.30 million.

Melco Crown Entertainment Limited, through its subsidiaries, engages in the development, ownership, and operation of casino gaming and entertainment resort facilities primarily in Macau. The company has a P/E ratio of 57.4, below the average leisure industry P/E ratio of 113.6 and above the S&P 500 P/E ratio of 17.7. Melco Crown Entertainment has a market cap of $6.2 billion and is part of the services sector and leisure industry. Shares are up 50.9% year to date as of the close of trading on Friday.

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