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) -- Cash America International (NYSE: CSH) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, expanding profit margins, impressive record of earnings per share growth and increase in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
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- The debt-to-equity ratio is somewhat low, currently at 0.68, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with this, the company maintains a quick ratio of 4.18, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for CASH AMERICA INTL INC is rather high; currently it is at 56.55%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 5.68% trails the industry average.
- CASH AMERICA INTL INC has improved earnings per share by 15.2% 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, CASH AMERICA INTL INC increased its bottom line by earning $4.64 versus $3.40 in the prior year. For the next year, the market is expecting a contraction of 7.3% in earnings ($4.30 versus $4.64).
- CSH, with its decline in revenue, slightly underperformed the industry average of 4.5%. Since the same quarter one year prior, revenues slightly dropped by 2.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.