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) -- E*Trade Financial (Nasdaq: ETFC) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, good cash flow from operations, expanding profit margins and solid stock price performance. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
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- E TRADE FINANCIAL CORP 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 year. We feel that this trend should continue. During the past fiscal year, E TRADE FINANCIAL CORP turned its bottom line around by earning $0.29 versus -$0.39 in the prior year. This year, the market expects an improvement in earnings ($0.91 versus $0.29).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 131.1% when compared to the same quarter one year prior, rising from -$186.06 million to $57.86 million.
- Net operating cash flow has significantly increased by 144.19% to $228.58 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 124.58%.
- 44.06% is the gross profit margin for E TRADE FINANCIAL CORP which we consider to be strong. 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 11.41% trails the industry average.
- Powered by its strong earnings growth of 130.76% and other important driving factors, this stock has surged by 116.49% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp 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 other strengths this company displays justify these higher price levels.