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) -- Crown Media Holdings (Nasdaq: CRWN) 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, attractive valuation levels, expanding profit margins, 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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- CRWN's revenue growth trails the industry average of 15.9%. Since the same quarter one year prior, revenues slightly increased by 4.1%. 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.
- The gross profit margin for CROWN MEDIA HOLDINGS INC is rather high; currently it is at 57.50%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 14.90% is above that of the industry average.
- Net operating cash flow has slightly increased to $12.23 million or 3.00% when compared to the same quarter last year. Despite an increase in cash flow, CROWN MEDIA HOLDINGS INC's average is still marginally south of the industry average growth rate of 6.53%.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. 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