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) -- TripAdvisor (Nasdaq: TRIP) 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, solid stock price performance, good cash flow from operations, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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- The revenue growth came in higher than the industry average of 7.7%. Since the same quarter one year prior, revenues rose by 19.9%. 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.
- Compared to its closing price of one year ago, TRIP's share price has jumped by 117.89%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, TRIP should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- Net operating cash flow has significantly increased by 89.70% to $145.04 million when compared to the same quarter last year. In addition, TRIPADVISOR INC has also vastly surpassed the industry average cash flow growth rate of 36.54%.
- The gross profit margin for TRIPADVISOR INC is currently very high, coming in at 97.96%. Regardless of TRIP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TRIP's net profit margin of 21.90% significantly outperformed against the industry.
- TRIPADVISOR INC's earnings per share declined by 7.3% 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, TRIPADVISOR INC increased its bottom line by earning $1.36 versus $0.16 in the prior year. This year, the market expects an improvement in earnings ($1.67 versus $1.36).