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) -- Range Resources Corporation (NYSE: RRC) 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, good cash flow from operations, expanding profit margins, increase in stock price during the past year and notable return on equity. 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 3.4%. Since the same quarter one year prior, revenues slightly increased by 7.7%. 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.
- Net operating cash flow has increased to $240.67 million or 29.41% when compared to the same quarter last year. In addition, RANGE RESOURCES CORP has also vastly surpassed the industry average cash flow growth rate of -51.04%.
- RANGE RESOURCES CORP's earnings per share declined by 46.9% 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, RANGE RESOURCES CORP increased its bottom line by earning $0.70 versus $0.06 in the prior year. This year, the market expects an improvement in earnings ($1.41 versus $0.70).
- The gross profit margin for RANGE RESOURCES CORP is rather high; currently it is at 63.86%. Regardless of RRC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, RRC's net profit margin of 6.60% compares favorably to the industry average.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.