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) -- Mistras Group (NYSE: MG) 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, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, increase in net income and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows low profit margins.
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- The revenue growth greatly exceeded the industry average of 16.0%. Since the same quarter one year prior, revenues rose by 24.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- The current debt-to-equity ratio, 0.31, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, MG has a quick ratio of 1.76, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has significantly increased by 168.19% to $10.43 million when compared to the same quarter last year. In addition, MISTRAS GROUP INC has also vastly surpassed the industry average cash flow growth rate of 1.59%.
- MISTRAS GROUP INC reported flat earnings per share in the most recent quarter. 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, MISTRAS GROUP INC increased its bottom line by earning $0.75 versus $0.61 in the prior year. This year, the market expects an improvement in earnings ($1.00 versus $0.75).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Professional Services industry average. The net income increased by 6.2% when compared to the same quarter one year prior, going from $6.72 million to $7.13 million.
-- Written by a member of TheStreet Ratings Staff