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) -- Expedia (Nasdaq: EXPE) has been reiterated by TheStreet Ratings as a buy with a ratings score of B- . The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, notable return on equity, good cash flow from operations and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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- EXPE's revenue growth trails the industry average of 24.2%. Since the same quarter one year prior, revenues rose by 13.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Internet & Catalog Retail industry and the overall market on the basis of return on equity, EXPEDIA INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- Net operating cash flow has increased to $552.78 million or 12.65% when compared to the same quarter last year. Despite an increase in cash flow, EXPEDIA INC's cash flow growth rate is still lower than the industry average growth rate of 53.61%.
- The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
--Written by a member of TheStreet Ratings Staff.FREE from Real Money's Jim Cramer: Winners and Losers Election 2012 - Steps to take NOW so you can profit no matter who is in charge! Free Download Now