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) -- Country Style Cooking Restaurant Chain (NYSE: CCSC) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and poor profit margins.
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- The revenue growth came in higher than the industry average of 4.4%. Since the same quarter one year prior, revenues rose by 20.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- CCSC 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. Along with this, the company maintains a quick ratio of 3.76, which clearly demonstrates the ability to cover short-term cash needs.
- COUNTRY STYLE COOK has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, COUNTRY STYLE COOK turned its bottom line around by earning $0.46 versus -$0.04 in the prior year.
- The gross profit margin for COUNTRY STYLE COOK is rather low; currently it is at 23.51%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 2.30% significantly trails the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income has significantly decreased by 58.7% when compared to the same quarter one year ago, falling from $2.97 million to $1.23 million.