Rating Change #7
EV Energy Partner LP (EVEP) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 7.0%. Since the same quarter one year prior, revenues slightly increased by 6.7%. 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.
- Net operating cash flow has increased to $61.99 million or 15.07% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -15.47%.
- The gross profit margin for EV ENERGY PARTNERS LP is rather high; currently it is at 57.90%. Regardless of EVEP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, EVEP's net profit margin of -72.80% significantly underperformed when compared to the industry average.
- EV ENERGY PARTNERS LP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, EV ENERGY PARTNERS LP reported lower earnings of $2.56 versus $3.50 in the prior year. For the next year, the market is expecting a contraction of 26.2% in earnings ($1.89 versus $2.56).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 157.0% when compared to the same quarter one year ago, falling from $87.81 million to -$50.02 million.