Editor's Note: 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
NEW YORK (
) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow, generally disappointing historical performance in the stock itself, deteriorating net income, disappointing return on equity and poor profit margins.
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Highlights from the ratings report include:
- Net operating cash flow has significantly decreased to $3.08 million or 74.90% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. When compared to other companies in the Building Products industry and the overall market, AMERESCO INC's return on equity has significantly outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- The share price of AMERESCO INC has not done very well: it is down 15.68% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- The change in net income from the same quarter one year ago has exceeded that of the Building Products industry average, but is less than that of the S&P 500. The net income has significantly decreased by 45.2% when compared to the same quarter one year ago, falling from $12.36 million to $6.77 million.
- The gross profit margin for AMERESCO INC is rather low; currently it is at 21.20%. Regardless of AMRC's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, AMRC's net profit margin of 4.10% compares favorably to the industry average.
Ameresco, Inc. provides energy efficiency solutions for facilities in North America. The company engages in the design, engineering, development, and installation of projects that reduce the energy, and operations and maintenance costs of its customers' facilities. The company has a P/E ratio of 18.9, above the S&P 500 P/E ratio of 17.7. Ameresco has a market cap of $250.5 million and is part of the industrial goods sector and industrial industry. Shares are down 32.6% year to date as of the close of trading on Friday.
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-- Written by a member of TheStreet Ratings Staff
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