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) -- CNinsure (Nasdaq: CISG) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and revenue growth. However, as a counter to these strengths, we also find weaknesses including poor profit margins, weak operating cash flow and a generally disappointing performance in the stock itself.
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- CNINSURE INC -ADS reported significant earnings per share improvement 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, CNINSURE INC -ADS turned its bottom line around by earning $0.41 versus -$1.38 in the prior year. This year, the market expects an improvement in earnings ($0.51 versus $0.41).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Insurance industry. The net income increased by 103.0% when compared to the same quarter one year prior, rising from -$113.30 million to $3.37 million.
- The gross profit margin for CNINSURE INC -ADS is currently lower than what is desirable, coming in at 32.30%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 4.71% trails that of the industry average.
- Net operating cash flow has significantly decreased to $3.78 million or 85.89% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
-- Written by a member of TheStreet Ratings Staff