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) -- Green Mountain Coffee Roasters (Nasdaq: GMCR) 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, growth in earnings per share, increase in net income and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
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- The revenue growth came in higher than the industry average of 1.1%. Since the same quarter one year prior, revenues rose by 15.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- GMCR's debt-to-equity ratio is very low at 0.18 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.02, which illustrates the ability to avoid short-term cash problems.
- GREEN MTN COFFEE ROASTERS has improved earnings per share by 6.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, GREEN MTN COFFEE ROASTERS increased its bottom line by earning $2.28 versus $1.30 in the prior year. This year, the market expects an improvement in earnings ($2.80 versus $2.28).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Food Products industry average. The net income increased by 3.0% when compared to the same quarter one year prior, going from $104.41 million to $107.58 million.
-- Written by a member of TheStreet Ratings Staff