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) -- ChinaEdu Corporation (Nasdaq: CEDU) 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, increase in net income, good cash flow from operations and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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- The revenue growth came in higher than the industry average of 7.6%. Since the same quarter one year prior, revenues slightly increased by 4.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- CEDU has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, CEDU has a quick ratio of 2.23, which demonstrates the ability of the company to cover short-term liquidity needs.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Diversified Consumer Services industry. The net income increased by 84.0% when compared to the same quarter one year prior, rising from $0.79 million to $1.45 million.
- Net operating cash flow has significantly increased by 55.07% to $3.88 million when compared to the same quarter last year. In addition, CHINAEDU CORP -ADR has also vastly surpassed the industry average cash flow growth rate of -64.19%.
- CHINAEDU CORP -ADR reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. 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, CHINAEDU CORP -ADR reported lower earnings of $0.16 versus $0.34 in the prior year. This year, the market expects an improvement in earnings ($0.42 versus $0.16).
-- Written by a member of TheStreet Ratings Staff