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) -- Comstock (Nasdaq: CHCI) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, weak operating cash flow and poor profit margins.
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- CHCI's very impressive revenue growth greatly exceeded the industry average of 29.5%. Since the same quarter one year prior, revenues leaped by 174.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 85.00% and other important driving factors, this stock has surged by 32.63% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- COMSTOCK HOLDING COS INC reported significant earnings per share improvement in the most recent quarter compared to 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, COMSTOCK HOLDING COS INC swung to a loss, reporting -$0.47 versus $0.10 in the prior year.
- Net operating cash flow has significantly decreased to -$8.81 million or 115.53% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The debt-to-equity ratio is very high at 5.09 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.