NEW YORK (TheStreet) -- Rex Energy Corporation (Nasdaq:REXX) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, weak operating cash flow and generally poor debt management.
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- REXX's very impressive revenue growth greatly exceeded the industry average of 11.9%. Since the same quarter one year prior, revenues leaped by 53.4%. Growth in the company's revenue appears to have helped boost 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 78.3% when compared to the same quarter one year prior, rising from -$7.50 million to -$1.63 million.
- The gross profit margin for REX ENERGY CORP is rather high; currently it is at 62.60%. Regardless of REXX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, REXX's net profit margin of -4.30% significantly underperformed when compared to the industry average.
- REXX has underperformed the S&P 500 Index, declining 7.84% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
- Net operating cash flow has decreased to $6.76 million or 41.92% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
-- Written by a member of TheStreet Ratings Staff
TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
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