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 revenue growth, compelling growth in net income and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, generally poor debt management and disappointing return on equity.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 14.6%. Since the same quarter one year prior, revenues rose by 31.1%. 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 Construction & Engineering industry. The net income increased by 160.6% when compared to the same quarter one year prior, rising from $24.59 million to $64.08 million.
- EMPRESAS ICA SAB DE CV reported significant earnings per share improvement 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, EMPRESAS ICA SAB DE CV reported lower earnings of $0.00 versus $0.45 in the prior year. This year, the market expects an increase in earnings to $0.83 from $0.00.
- The debt-to-equity ratio is very high at 2.96 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, ICA maintains a poor quick ratio of 0.94, which illustrates the inability to avoid short-term cash problems.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Construction & Engineering industry and the overall market on the basis of return on equity, EMPRESAS ICA SAB DE CV underperformed against that of the industry average and is significantly less than that of the S&P 500.
Empresas ICA, S.A.B. de C.V., through its subsidiaries, primarily engages in construction and related activities in Mexico and Latin America. The company has a P/E ratio of 0.6, below the S&P 500 P/E ratio of 17.7. Empresas ICA S.A.B. de C.V has a market cap of $911.6 million and is part of the
industry. Shares are up 30.1% 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.