NEW YORK (
) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally poor debt management and poor profit margins.
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Highlights from the ratings report include:
- ADES's very impressive revenue growth greatly exceeded the industry average of 2.3%. Since the same quarter one year prior, revenues leaped by 647.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Chemicals industry and the overall market, ADA-ES INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- ADA-ES INC has improved earnings per share by 13.3% 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, ADA-ES INC reported poor results of -$2.90 versus -$2.09 in the prior year. This year, the market expects an improvement in earnings ($0.31 versus -$2.90).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Chemicals industry. The net income has decreased by 16.5% when compared to the same quarter one year ago, dropping from -$2.25 million to -$2.62 million.
- Currently the debt-to-equity ratio of 1.58 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with the unfavorable debt-to-equity ratio, ADES maintains a poor quick ratio of 0.73, which illustrates the inability to avoid short-term cash problems.
ADA-ES, Inc., together with its subsidiaries, provides environmental technologies and specialty chemicals to the coal-burning electric power generation industry in the United States. The company has a P/E ratio of 23.7, below the average industrial industry P/E ratio of 24.1 and above the S&P 500 P/E ratio of 17.7. ADA-ES has a market cap of $239.2 million and is part of the
industry. Shares are up 5.5% year to date as of the close of trading on Wednesday.
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-- 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.