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) -- Capital Senior Living Corporation (NYSE: CSU) 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, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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- CSU's revenue growth has slightly outpaced the industry average of 14.4%. Since the same quarter one year prior, revenues rose by 14.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Compared to its closing price of one year ago, CSU's share price has jumped by 136.44%, exceeding the performance of the broader market during that same time frame. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- Net operating cash flow has significantly increased by 3833.48% to $17.86 million when compared to the same quarter last year. In addition, CAPITAL SENIOR LIVING CORP has also vastly surpassed the industry average cash flow growth rate of -82.58%.
- CAPITAL SENIOR LIVING CORP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, CAPITAL SENIOR LIVING CORP reported lower earnings of $0.11 versus $0.16 in the prior year. This year, the market expects an improvement in earnings ($0.31 versus $0.11).
- The gross profit margin for CAPITAL SENIOR LIVING CORP is rather low; currently it is at 21.00%. Regardless of CSU's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of -1.20% trails the industry average.
-- Written by a member of TheStreet Ratings Staff