Rating Change #8
CVR Energy (CVI) 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, compelling growth in net income, solid stock price performance, impressive record of earnings per share growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the ratings report include:
- CVI's debt-to-equity ratio of 0.63 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.77 is weak.
- CVR ENERGY INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. 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, CVR ENERGY INC reported lower earnings of $0.17 versus $0.80 in the prior year. This year, the market expects an improvement in earnings ($2.57 versus $0.17).
- Powered by its strong earnings growth of 471.42% and other important driving factors, this stock has surged by 185.67% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- 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 470.4% when compared to the same quarter one year prior, rising from -$12.36 million to $45.79 million.
- CVI's revenue growth has slightly outpaced the industry average of 23.6%. Since the same quarter one year prior, revenues rose by 30.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
CVR Energy, Inc., together with its subsidiaries, refines and markets transportation fuels in the United States. The company also produces and markets nitrogen fertilizer products. It operates through two segments, Petroleum and Nitrogen Fertilizer. The company has a P/E ratio of 25.5, below the average energy industry P/E ratio of 26.2 and above the S&P 500 P/E ratio of 17.7. CVR Energy has a market cap of $1.9 billion and is part of the basic materials sector and energy industry. Shares are up 49.8% year to date as of the close of trading on Wednesday.You can view the full CVR Energy Ratings Report or get investment ideas from our investment research center.
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