China Lodging Group Ltd Stock Upgraded (HTHT)

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) -- China Lodging Group (Nasdaq: HTHT) 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, solid stock price performance, reasonable valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

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Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 5.8%. Since the same quarter one year prior, revenues rose by 19.2%. 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.
  • This stock has managed to rise its share value by 59.08% over the past twelve months. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • Net operating cash flow has significantly increased by 83.08% to $20.95 million when compared to the same quarter last year. In addition, CHINA LODGING GROUP LTD -ADR has also vastly surpassed the industry average cash flow growth rate of -3.37%.
  • CHINA LODGING GROUP LTD -ADR's earnings have gone downhill when comparing its most recently reported quarter with the same quarter a year earlier. 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, CHINA LODGING GROUP LTD -ADR increased its bottom line by earning $0.74 versus $0.46 in the prior year. This year, the market expects an improvement in earnings ($5.54 versus $0.74).

China Lodging Group, Limited develops, leases, manachises, and franchises hotels in the People's Republic of China. The company operates hotels under the Joya Hotel, Manxin Hotels & Resorts, JI Hotel, Starway Hotel, HanTing Hotel, and Hi Inn brands primarily for business and leisure travelers. China Lodging Group has a market cap of $1.54 billion and is part of the services sector and leisure industry. Shares are down 18% year to date as of the close of trading on Tuesday.

You can view the full China Lodging Group Ratings Report or get investment ideas from our investment research center.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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