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) -- Hertz Global Holdings (NYSE: HTZ) 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, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
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- HERTZ GLOBAL HOLDINGS 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, HERTZ GLOBAL HOLDINGS INC turned its bottom line around by earning $0.38 versus -$0.14 in the prior year. This year, the market expects an improvement in earnings ($1.33 versus $0.38).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Road & Rail industry. The net income increased by 68.9% when compared to the same quarter one year prior, rising from $55.00 million to $92.89 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 8.8%. Since the same quarter one year prior, revenues slightly increased by 7.4%. 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 increased to $666.41 million or 27.84% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 4.20%.
- 49.70% is the gross profit margin for HERTZ GLOBAL HOLDINGS INC which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, HTZ's net profit margin of 4.20% significantly trails the industry average.
-- Written by a member of TheStreet Ratings Staff