NEW YORK ( TheStreet) -- Stage Stores (NYSE: SSI) 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, attractive valuation levels, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity. Highlights from the ratings report include:
- SSI's revenue growth has slightly outpaced the industry average of 1.6%. Since the same quarter one year prior, revenues slightly increased by 5.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Net operating cash flow has slightly increased to $63.67 million or 3.43% when compared to the same quarter last year. Despite an increase in cash flow, STAGE STORES INC's average is still marginally south of the industry average growth rate of 7.75%.
- Although SSI's debt-to-equity ratio of 0.12 is very low, it is currently higher than that of the industry average. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.10 is very weak and demonstrates a lack of ability to pay short-term obligations.
- STAGE STORES INC has improved earnings per share by 22.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, STAGE STORES INC reported lower earnings of $0.97 versus $1.01 in the prior year. This year, the market expects an improvement in earnings ($1.26 versus $0.97).
-- Written by a member of TheStreet RatingsStaff