NEW YORK ( TheStreet) -- Culp (NYSE: CFI) 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, attractive valuation levels, good cash flow from operations and increase in net income. We feel these strengths outweigh the fact that the company shows low profit margins. Highlights from the ratings report include:
- CFI's revenue growth has slightly outpaced the industry average of 11.3%. Since the same quarter one year prior, revenues rose by 18.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- CFI's debt-to-equity ratio is very low at 0.11 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.29, which illustrates the ability to avoid short-term cash problems.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Textiles, Apparel & Luxury Goods industry. The net income increased by 56.2% when compared to the same quarter one year prior, rising from $4.00 million to $6.25 million.
- Net operating cash flow has significantly increased by 116.98% to $6.22 million when compared to the same quarter last year. In addition, CULP INC has also vastly surpassed the industry average cash flow growth rate of -87.43%.