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) -- CME Group (Nasdaq: CME) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, revenue growth, reasonable valuation levels and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.
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- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 31.93% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, CME should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- CME GROUP INC has improved earnings per share by 16.0% 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 year. We feel that this trend should continue. During the past fiscal year, CME GROUP INC increased its bottom line by earning $2.93 versus $2.70 in the prior year. This year, the market expects an improvement in earnings ($3.61 versus $2.93).
- Despite its growing revenue, the company underperformed as compared with the industry average of 13.4%. Since the same quarter one year prior, revenues slightly increased by 4.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The gross profit margin for CME GROUP INC is rather high; currently it is at 56.40%. Regardless of CME's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CME's net profit margin of 27.70% significantly outperformed against the industry.