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) -- National Research Corporation (Nasdaq: NRCIB) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, compelling growth in net income and revenue growth. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.
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- NATIONAL RESEARCH CORP has improved earnings per share by 14.3% 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. This trend suggests that the performance of the business is improving. During the past fiscal year, NATIONAL RESEARCH CORP increased its bottom line by earning $4.34 versus $3.40 in the prior year. This year, the market expects an improvement in earnings ($4.79 versus $4.34).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Health Care Providers & Services industry average. The net income increased by 16.1% when compared to the same quarter one year prior, going from $3.85 million to $4.47 million.
- The gross profit margin for NATIONAL RESEARCH CORP is rather high; currently it is at 58.90%. Regardless of NRCIB's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NRCIB's net profit margin of 17.94% significantly outperformed against the industry.
- NRCIB's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 57.11%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, NRCIB is still more expensive than most of the other companies in its industry.
-- Written by a member of TheStreet Ratings Staff