National CineMedia Inc. Stock Upgraded (NCMI)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

NEW YORK ( TheStreet) -- National CineMedia (Nasdaq: NCMI) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income, good cash flow from operations, expanding profit margins and solid stock price performance. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

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Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 2.4%. Since the same quarter one year prior, revenues rose by 11.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Media industry. The net income increased by 600.0% when compared to the same quarter one year prior, rising from -$1.90 million to $9.50 million.
  • Net operating cash flow has significantly increased by 688.46% to $15.30 million when compared to the same quarter last year. In addition, NATIONAL CINEMEDIA INC has also vastly surpassed the industry average cash flow growth rate of -8.70%.
  • The gross profit margin for NATIONAL CINEMEDIA INC is currently very high, coming in at 71.09%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 7.73% trails the industry average.
  • Powered by its strong earnings growth of 666.66% and other important driving factors, this stock has surged by 28.98% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.

National CineMedia, Inc., through its subsidiaries, operates a digital in-theatre media network in North America. The company operates in two segments, Advertising and Fathom Events. National CineMedia has a market cap of $1.01 billion and is part of the services sector and media industry. Shares are up 29% year to date as of the close of trading on Friday.

You can view the full National CineMedia Ratings Report or get investment ideas from our investment research center.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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