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) -- Crescent Point Energy (NYSE: CPG) 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, increase in net income, good cash flow from operations, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. 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 3.2%. Since the same quarter one year prior, revenues rose by 17.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 2016.3% when compared to the same quarter one year prior, rising from -$1.61 million to $30.89 million.
- Net operating cash flow has increased to $574.14 million or 25.01% when compared to the same quarter last year. In addition, CRESCENT POINT ENERGY CORP has also modestly surpassed the industry average cash flow growth rate of 16.78%.
- The gross profit margin for CRESCENT POINT ENERGY CORP is currently very high, coming in at 70.56%. 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 4.71% trails the industry average.
- CPG's debt-to-equity ratio is very low at 0.24 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.34 is very weak and demonstrates a lack of ability to pay short-term obligations.