NEW YORK ( TheStreet) -- Global Cash Access Holdings (NYSE: GCA) 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, compelling growth in net income, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company shows low profit margins. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 2.5%. Since the same quarter one year prior, revenues rose by 12.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.84, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the IT Services industry. The net income increased by 309.2% when compared to the same quarter one year prior, rising from $1.74 million to $7.13 million.
- Net operating cash flow has significantly increased by 996.56% to $18.28 million when compared to the same quarter last year. In addition, GLOBAL CASH ACCESS HOLDINGS has also vastly surpassed the industry average cash flow growth rate of 11.43%.
- Powered by its strong earnings growth of 266.66% and other important driving factors, this stock has surged by 131.34% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
-- Written by a member of TheStreet RatingsStaff