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NEW YORK (TheStreet) -- Cheniere Energy (LNG) - Get Report has been downgraded by TheStreet Ratings from Hold to Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate CHENIERE ENERGY INC (LNG) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income and feeble growth in its earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 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 30.5% when compared to the same quarter one year ago, falling from -$154.76 million to -$201.93 million.
- CHENIERE ENERGY INC's earnings per share declined by 26.8% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, CHENIERE ENERGY INC reported poor results of -$2.32 versus -$1.82 in the prior year. This year, the market expects an improvement in earnings (-$1.27 versus -$2.32).
- The gross profit margin for CHENIERE ENERGY INC is rather high; currently it is at 56.39%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -298.51% is in-line with the industry average.
- Net operating cash flow has significantly increased by 179.75% to $6.88 million when compared to the same quarter last year. In addition, CHENIERE ENERGY INC has also vastly surpassed the industry average cash flow growth rate of -4.89%.
- Compared to its closing price of one year ago, LNG's share price has jumped by 110.31%, exceeding the performance of the broader market during that same time frame. Regarding the future course of this stock, we feel that the risks involved in investing in LNG do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
- You can view the full analysis from the report here: LNG Ratings Report