NEW YORK ( TheStreet) -- VCA Antech (Nasdaq: WOOF) 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, increase in net income, growth in earnings per share, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself. Highlights from the ratings report include:
- WOOF's revenue growth has slightly outpaced the industry average of 9.7%. Since the same quarter one year prior, revenues rose by 15.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Health Care Providers & Services industry average. The net income increased by 22.2% when compared to the same quarter one year prior, going from $28.84 million to $35.25 million.
- Net operating cash flow has increased to $73.66 million or 20.30% when compared to the same quarter last year. Despite an increase in cash flow, VCA ANTECH INC's cash flow growth rate is still lower than the industry average growth rate of 64.97%.
- The current debt-to-equity ratio, 0.57, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.74 is somewhat weak and could be cause for future problems.
- VCA ANTECH INC has improved earnings per share by 21.2% 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, VCA ANTECH INC reported lower earnings of $1.09 versus $1.28 in the prior year. This year, the market expects an improvement in earnings ($1.45 versus $1.09).
-- Written by a member of TheStreet RatingsStaff