NEW YORK ( TheStreet) -- Select Medical Holdings Corporation (NYSE: SEM) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, attractive valuation levels 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:
- SELECT MEDICAL HOLDINGS CORP has improved earnings per share by 31.8% 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. We feel that this trend should continue. During the past fiscal year, SELECT MEDICAL HOLDINGS CORP increased its bottom line by earning $0.72 versus $0.48 in the prior year. This year, the market expects an improvement in earnings ($0.94 versus $0.72).
- 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 23.4% when compared to the same quarter one year prior, going from $33.67 million to $41.54 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 11.9%. Since the same quarter one year prior, revenues slightly increased by 7.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Net operating cash flow has significantly increased by 262.55% to $8.18 million when compared to the same quarter last year. In addition, SELECT MEDICAL HOLDINGS CORP has also vastly surpassed the industry average cash flow growth rate of 108.62%.
-- Written by a member of TheStreet RatingsStaff