NEW YORK ( TheStreet) -- AAON (Nasdaq: AAON) 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, good cash flow from operations, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself. Highlights from the ratings report include:
- AAON's revenue growth has slightly outpaced the industry average of 6.7%. Since the same quarter one year prior, revenues slightly increased by 8.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- AAON has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.16, which illustrates the ability to avoid short-term cash problems.
- Net operating cash flow has significantly increased by 717.73% to $11.57 million when compared to the same quarter last year. In addition, AAON INC has also vastly surpassed the industry average cash flow growth rate of 37.52%.
- AAON INC has improved earnings per share by 22.7% 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, AAON INC reported lower earnings of $0.57 versus $0.87 in the prior year. This year, the market expects an improvement in earnings ($0.83 versus $0.57).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Building Products industry average, but is greater than that of the S&P 500. The net income increased by 25.1% when compared to the same quarter one year prior, rising from $3.65 million to $4.57 million.
-- Written by a member of TheStreet RatingsStaff