Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model NEW YORK ( TheStreet) -- MYR Group (Nasdaq: MYRG) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
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- The revenue growth greatly exceeded the industry average of 9.0%. Since the same quarter one year prior, revenues rose by 40.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- MYR GROUP INC reported significant earnings per share improvement 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, MYR GROUP INC increased its bottom line by earning $0.87 versus $0.77 in the prior year. This year, the market expects an improvement in earnings ($1.53 versus $0.87).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Construction & Engineering industry. The net income increased by 156.5% when compared to the same quarter one year prior, rising from $3.72 million to $9.54 million.
- Net operating cash flow has significantly increased by 4845.31% to $22.16 million when compared to the same quarter last year. In addition, MYR GROUP INC has also vastly surpassed the industry average cash flow growth rate of 21.02%.
- MYRG's debt-to-equity ratio is very low at 0.04 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.99 is somewhat weak and could be cause for future problems.
-- Written by a member of TheStreet Ratings Staff