NEW YORK ( TheStreet) -- TRC Companies (NYSE: TRR) 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, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 2.0%. Since the same quarter one year prior, revenues rose by 27.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Although TRR's debt-to-equity ratio of 0.22 is very low, it is currently higher than that of the industry average. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.04, which illustrates the ability to avoid short-term cash problems.
  • TRC COS INC 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. During the past fiscal year, TRC COS INC continued to lose money by earning -$0.64 versus -$1.17 in the prior year.
  • 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 591.1% when compared to the same quarter one year prior, rising from $2.70 million to $18.69 million.
  • Net operating cash flow has significantly increased by 154.90% to $7.97 million when compared to the same quarter last year. In addition, TRC COS INC has also vastly surpassed the industry average cash flow growth rate of 1.28%.

TRC Companies, Inc. provides consulting, engineering, and construction management services in the United States. The company has a P/E ratio of 176.7, below the average materials & construction industry P/E ratio of 530 and above the S&P 500 P/E ratio of 17.7. TRC Companies has a market cap of $147.4 million and is part of the industrial goods sector and materials & construction industry. Shares are up 51.4% year to date as of the close of trading on Tuesday.

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