NEW YORK ( TheStreet) -- Franklin Covey Company (NYSE: FC) 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 solid stock price performance. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook. Highlights from the ratings report include:
- FC's revenue growth has slightly outpaced the industry average of 0.5%. Since the same quarter one year prior, revenues slightly increased by 0.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- FRANKLIN COVEY CO 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 two years. We feel that this trend should continue. During the past fiscal year, FRANKLIN COVEY CO turned its bottom line around by earning $0.27 versus -$0.09 in the prior year. This year, the market expects an improvement in earnings ($0.33 versus $0.27).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Professional Services industry. The net income increased by 673.8% when compared to the same quarter one year prior, rising from -$0.52 million to $2.98 million.
- Net operating cash flow has significantly increased by 515.13% to $9.43 million when compared to the same quarter last year. In addition, FRANKLIN COVEY CO has also vastly surpassed the industry average cash flow growth rate of 96.68%.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.