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) -- TAL Education Group (NYSE: XRS) 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, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. 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 greatly exceeded the industry average of 13.7%. Since the same quarter one year prior, revenues rose by 20.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- XRS has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign.
- TAL EDUCATION GROUP 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. During the past fiscal year, TAL EDUCATION GROUP increased its bottom line by earning $0.32 versus $0.14 in the prior year. This year, the market expects an improvement in earnings ($0.51 versus $0.32).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Diversified Consumer Services industry. The net income increased by 288.5% when compared to the same quarter one year prior, rising from $1.44 million to $5.60 million.
- 45.30% is the gross profit margin for TAL EDUCATION GROUP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 11.44% is above that of the industry average.
-- Written by a member of TheStreet Ratings Staff