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) -- Noah Holdings (NYSE: NOAH) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and growth in earnings per share. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.
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- The revenue growth came in higher than the industry average of 12.2%. Since the same quarter one year prior, revenues rose by 33.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- NOAH HOLDINGS LTD -ADR has improved earnings per share by 40.0% 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, NOAH HOLDINGS LTD -ADR increased its bottom line by earning $0.42 versus $0.14 in the prior year. This year, the market expects an improvement in earnings ($0.55 versus $0.42).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Capital Markets industry average, but is greater than that of the S&P 500. The net income increased by 31.7% when compared to the same quarter one year prior, rising from $5.73 million to $7.55 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Capital Markets industry and the overall market on the basis of return on equity, NOAH HOLDINGS LTD -ADR has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
-- Written by a member of TheStreet Ratings Staff