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) -- Sabra Health Care REIT (Nasdaq: SBRA) 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, expanding profit margins, good cash flow from operations, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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- The revenue growth came in higher than the industry average of 6.3%. Since the same quarter one year prior, revenues rose by 32.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- SABRA HEALTH CARE REIT INC reported significant earnings per share improvement 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 two years. We feel that this trend should continue. During the past fiscal year, SABRA HEALTH CARE REIT INC increased its bottom line by earning $0.67 versus $0.53 in the prior year. This year, the market expects an improvement in earnings ($1.16 versus $0.67).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 228.3% when compared to the same quarter one year prior, rising from $3.96 million to $13.00 million.
- The gross profit margin for SABRA HEALTH CARE REIT INC is rather high; currently it is at 63.30%. It has increased significantly from the same period last year. Along with this, the net profit margin of 34.61% significantly outperformed against the industry average.
- Net operating cash flow has significantly increased by 54.34% to $12.89 million when compared to the same quarter last year. In addition, SABRA HEALTH CARE REIT INC has also vastly surpassed the industry average cash flow growth rate of -70.56%.