NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. The company's strongest point has been its a solid financial position based on a variety of debt and liquidity measures that we have looked at. At the same time, however, 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.
Highlights from the ratings report include:
- GPRE, with its decline in revenue, slightly underperformed the industry average of 0.4%. Since the same quarter one year prior, revenues slightly dropped by 4.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Currently the debt-to-equity ratio of 1.61 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. To add to this, GPRE has a quick ratio of 0.64, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
- GREEN PLAINS RENEWABLE ENRGY 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, GREEN PLAINS RENEWABLE ENRGY reported lower earnings of $1.02 versus $1.52 in the prior year. For the next year, the market is expecting a contraction of 77.0% in earnings ($0.24 versus $1.02).
- 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 263.9% when compared to the same quarter one year ago, falling from $7.74 million to -$12.69 million.
Green Plains Renewable Energy, Inc. engages in the production, marketing, and distribution of ethanol, distillers grains, and corn oil in the United States. The company has a P/E ratio of 17.1, equal to the average chemicals industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Green Plains Renewable Energy has a market cap of $213 million and is part of the
industry. Shares are down 27.2% 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.