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) -- Carnival Corporation (NYSE: CCL) has been reiterated by TheStreet Ratings as a hold with a ratings score of C+. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in stock price during the past year and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and poor profit margins.
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- CCL's revenue growth has slightly outpaced the industry average of 2.7%. Since the same quarter one year prior, revenues slightly increased by 0.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- CARNIVAL CORP/PLC (USA) reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CARNIVAL CORP/PLC (USA) reported lower earnings of $1.67 versus $2.42 in the prior year. This year, the market expects an improvement in earnings ($2.00 versus $1.67).
- The gross profit margin for CARNIVAL CORP/PLC (USA) is currently lower than what is desirable, coming in at 27.70%. Regardless of CCL's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, CCL's net profit margin of 1.02% is significantly lower than the industry average.
- 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. In comparison to the other companies in the Hotels, Restaurants & Leisure industry and the overall market, CARNIVAL CORP/PLC (USA)'s return on equity is significantly below that of the industry average and is below that of the S&P 500.
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