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) -- American Public Education (Nasdaq: APEI) 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, expanding profit margins, good cash flow from operations and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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- The revenue growth greatly exceeded the industry average of 7.5%. Since the same quarter one year prior, revenues rose by 22.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- APEI 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, APEI has a quick ratio of 2.40, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for AMERICAN PUBLIC EDUCATION is rather high; currently it is at 64.80%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 12.40% is above that of the industry average.
- Net operating cash flow has increased to $7.85 million or 35.35% when compared to the same quarter last year. In addition, AMERICAN PUBLIC EDUCATION has also vastly surpassed the industry average cash flow growth rate of -64.16%.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Diversified Consumer Services industry average. The net income increased by 3.0% when compared to the same quarter one year prior, going from $8.98 million to $9.24 million.
-- Written by a member of TheStreet Ratings Staff